Cash Flow Management Made Easy
Management involves various activities, some more complicated than others. When you consider cash flow management as a compulsory part of the manager’s routine, it cries trouble. It is only understandable that with all the fuss of running a business, especially when you are a creative person, cash flow is the last thing on your mind.
Money is good, but not when you have to work with them.
Keeping track of revenue and expenses seems burdensome. At least it sounds like this.
Cash Flow Management – pompous, isn’t it? Unfortunately, there is no other friendlier way to call it (or we haven’t found one yet). The good news is that it’s much easier than it sounds. Honestly.
Regular “cash flow workouts”
You know how it feels much easier if you workout regularly, instead of two intense hours once a week? The same goes for mastering the cash flow of your business. Don’t postpone it over and over again, it will just add up and make you feel overwhelmed facing a pile of receipts, invoices and bank statements. To avoid that, register the transactions once they happen. Periodically. If your business doesn’t operate hundreds of transactions per week, this shouldn’t take much time.
The key lies in the tool
The question is where to enter this data, to actually make some sense out of it. You could use spreadsheets; create a table with revenue and expense categories, organized per day/week/month, as you find it suitable. This, however, doesn’t offer much flexibility. You need to figure out formulas for total values, watch the dynamic. If something changes, however, like a customer paying later or just part of the sum, it probably alters most of your other entries.
The right tool
But there is an easier way. Take an already built tool (yes, like ours), which is already “trained” to do the calculations in your place. You just name the categories and start registering the payments and income. Once you get the hold of this, you can go a bit further and start making predictions. Anticipate future revenue and costs and see what happens to your cash reserves.
Now be bold. Become the master of the cash flow.
Such a solution not only does most of the work for you but also gives the ease and flexibility to play with hypotheses. Imagine in advance how the business will look like in a couple of months. You’ll be able to see if you need to borrow any money for a new piece of equipment, for instance. Or find out if you can afford a new employee until the end of the year. This kind of information will further open your eyes about the business strategy.
So you see…
… it seems more complicated than it really is. We know that the easiest way would be to elude managing the business cash flow, but if you care about the company, this is definitely not an option.
Trust technology to do most of the work and give it a try. You’ll see financial anxiety fading away little by little and you’ll feel more confident about your business decisions. Yes, it is that easy!