Take Charge of Your Cash Flow

Understanding cash flow is essential for the health and sustainability of any business. Here are a few best practices:

• Create and analyze a cash flow statement (monthly).

Track cash flow by creating a statement that shows the beginning balance, cash received (sales, collections), and cash spent. A decreasing balance indicates negative cash flow and a need for adjustments.

• Build a cash flow history.

Analyze historical financial records to understand seasonal trends and identify months that require more attention.

• Forecast cash flow needs (12-24 months).

Use your cash flow history to project future needs. This will help you determine how much excess cash is required during low-cash months.

• Implement cash flow improvement ideas.

Consider reducing the time between shipping and invoicing, re-examining credit and collection policies, or converting excess inventory back to cash.

• Manage growth carefully.

When expanding into new markets, developing new products, or hiring employees, consider the impact on cash flow.

Stay ahead of cash flow and bookkeeping challenges by preparing now for changes coming to QuickBooks Desktop. View our latest video from Janine Kiriluk, “What to do with Your QuickBooks Subscription,” at https://alloysilverstein.com/QB24.