“Is my cash flow under control?”
This is possibly the most important question for a business owner to consider. And let’s face it, without cash flow, there is no business.
The book, Never Run Out of Cash by expert financial consultant, Philip Campbell, provides a tremendous amount of information for a small business looking for education on business finances.
“Is my cash under control?” is the question Campbell urges business owners to not only ask, but to confidently be able to answer.
Unfortunately, for many business owners, the answer is, “I don’t know.”
According to Campbell’s book, not having cash flow under control means businesses are missing out on these benefits:
Benefits of Having Your Cash Flow Under Control
- In terms of your cash balance, knowing exactly where you are and where you are going will eliminate worry, stress, and wasted effort.
- Increase the likelihood that your business is a success and that you never run out of cash.
- Free yourself to focus on increasing your revenues and reducing costs. You’ll be amazed at what you can accomplish when you’re not worrying about what’s going on with your cash balance.
- Know you have accurate financial information to make business decisions. You dramatically increase the quality of your decisions when they are made based on your correct cash balance.
- Set specific goals for what you want the cash balance to be is the first step to achieving what you want from your business. With your cash flow under control, you have the necessary information to set meaningful financial goals.
- See cash flow problems before they happen. You have a much better chance of solving cash flow problems when you see them in advance. When you have a six-month “heads up” on the problem, you can map out a plan to fix it and put the plan into action. You have a window of opportunity to solve the problem.
How Do You Get There?
If those benefits sound good to you, then you understand the power of having cash flow under control.
So the question is, how do you get there?
Before you can start thinking about how to get there, let’s define what it means to have cash flow under control. Campbell provides his definition simply by being able to answer two questions.
- What is my cash balance right now?
- What do I expect my cash balance to be six months from now?
Kahuna Accounting believes your accounting process is something that should be allowing you to look forward, not backward. As a business, you want to be proactive, creating your own future, not reactive based on what has happened.
If you can answer those two questions, without hesitation, congratulations, you have your cash flow under control!
What if you can’t answer these questions? What if you feel stuck? The good news is, with today’s technology and services available like Kahuna Accounting, it’s not hard to quickly get to a place where you know exactly where your cash balance is, and more importantly, where it’s going to be.
If that’s something you’d like to learn more about, we’d love to talk to you!
Interested in learning more about how to connect your cash flow with your goals? Schedule a strategy call with Kahuna Accounting and we can discuss best practices for driving cash flow, profit, and growth!Schedule Discovery Meeting