Why Cash Flow is so Important to Biz?

LizSMpicA business that lacks consistent and regular cash flow can come crashing down. It would not be an exaggeration to call cash flow the heartbeat of a business. Once the heartbeat dies, the business dies too. Hence, every business owner needs to ensure regular cash flow in his business. Keep a close check on your business financial statements. Why cash flow is so important for small biz? Most business owners leave the finances solely to an accountant. In case they use small accounting cash flow software, they fail to update the software regularly. As a result of this, they frequently lose control of their business finances.

So what makes cash flow so important for the business? In the first place, it helps you in finding growth opportunities for your business. With regular small accounting cash flow, it would become easier for you to respond to the demands of your business. Whether it is an emergency decision that needs to be taken or it is repair, maintenance or even purchase of new assets, cash flow is essential. In addition to this, it can help you in managing your debt with ease. If you have cash, paying off your debt on time and avoiding any late fee and additional charges will become very easy for you. In a way, regular cash will save more cash for you.

A distressed business can easily be identified by the way it manages cash. Hence, you need to make sure that you maintain cash flow in your business. This does not mean that you should bring in huge investments every six months in your business. It is about the daily, weekly and monthly expenses and income flow that keeps your business alive. There can be many streams through which cash can start to flow in your business. The first and most obvious source is your savings. As a business owner, your savings can be utilized very well in managing your business’ cash needs. However, this source is not unlimited. As a result of this, you will probably have to cut expenses everywhere and save money.

The second source of cash flow is a loan. Your family members, friends and even a bank can lend you money to run your business. This kind of cash flow is great in terms of the overall amount you receive. However, you need to repay everything with a good return and this can prove fairly burdensome. Start checking on your business financial statements from today and ensure that cash flow is never interrupted.

 

Blog written by Liz Soria, CPB, aTP

Express Tax and Bookkeeping Svc

www.etbsfl.com

 

 

 

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