Sep 30, 2020 How do I Keep Track of Cash Flow?
Cash Flow is the movement of money into and out of your business. The lack of cash flow is one of the biggest reasons why small businesses fail. 82% of businesses fail due to bad cash flow management. Here are our tips on managing your cash flow.
1. Cash Flow Analysis
To perform a cash flow analysis, you will need to prepare a cash flow statement to track the cash coming in and out. The three main things to include in the statement are operating activities, investing activities and financing activities. Through a statement, you can easily perform an analysis to identify and predict cash flow problems.
2. Accounting Software
Utilise accounting software such as Xero to monitor your cash flow. This type of software makes it easy for you to stay on top of your cash flow. A reliable accounting software can also help you track business metrics. Our partners at PopBusiness can offer exclusive Xero discounts and great accounting support.
3. Create a business budget
Create an annual budget by predicting how much cash you need each month. Limit your unnecessary expenses according to the budget. Having a budget is crucial for small businesses in order to maintain a positive cash flow.
4. Mobile Payment Solutions
Using cashless payment allows you to get paid faster and makes it easier for you to keep track of cash coming in. Applications like Square and Neto are great for retail Point-of-Sales and payment tracking. If you would like to pay in instalments or offer payment instalment options for your customers QuickaPay is a great option, increasing your cashflow with flexible payment terms.
5. Separate Business and personal
It is common knowledge that you should separate your work life and personal life, and that also applies to your business and personal finance. Keep them separated so you can effectively track the cash flow of your business and business performance. You can open a bank account for small businesses with NAB.
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