Your Business Cash Flow

Today let’s have some fun understanding your Cash Flow dollars with business sense!

I did not like numbers until I started spending and making money. Does that sound like you – I hope not. Money matters are part of everyone’s life whether managing your own business or working for a company. Having available cash to spend and pay bills is also a part of regular everyday life. So understanding your cash flow, and liquidity to get financing to meet commitments is key to your success. Money does tell a story, and in business we have to read, interpret, and act on what is presented.

For entrepreneurs and business operators its time to dig a little into what your cash flow from operating activities comprises;

✅Receipts from sale of goods and services

✅Interest payments

✅Income tax payments

✅Supplier payments

✅Salaries and wages

✅Rent

✅Other operating expenses – phone, utilities, etc

To prepare your Cash Flow Statement gather your documents and information from sources. These sources will be from

✅cash from operating activities ✅cash from investment activities ✅cash from financing activities.

Here is a quick idea of what it looks like using a direct method :-

Revenue

Collection from customers 10,000

Deductions

Suppliers (5,000)

Salaries & Wages (2,000)

Net Cash from Operating Activities 3,000

_{*Simple basic straightforward example}

As an entrepreneur this is something you need to know and understand. While its prudent to have your accountant furnish you with accurate reports and statements, you should know the basics to read and understand what those numbers mean. Based on the complexity of your business operations details will vary, but the basics remain the same.

When approaching the bank financial institution or investor, there will be some main questions on inflows and outflows, sales, business projections for future earnings, and your knowledge and resources used for daily operations. They need to assess your commitment, stability, and sound financial accountability management. It is all a part of the business process.

Every business needs a trusted accountant for growth sustainability and success. You must keep proper records for the accountant to generate accurate complete reports – thus I’m gonna stress on developing a recordkeeping system updated daily/weekly to ensure everything is captured. With this size does not matter, but establishing good business habits will always make decision-making more realistic!

Have a financially fun day!😊

Before you go– I just launched CASE – 10 sessions/5 weeks Commercial Action Strategy to Execution. There is support for your business/ entrepreneurial work in progress – all sessions conducted online. 
Let’s engage further – check out my services and book a session at  https://dluisaconsulting.company.site/