Cashflow

With Calathea Accounting

Put simply, cashflow is the measurement of all the money coming into and out of your business within a particular period of time.

It’s really important that we measure your businesses cashflow position to ensure that it is economically viable to succeed.

Once your initial cashflow report is set up, it needs to be regularly maintained to ensure that its accurate and correct. Then this can be your go-to reporting tool when you need to make a business decision.

I worked alongside a business recently that felt like they could take on a new member of staff but they knew that they needed more than a feeling to ensure their business could cope with the extra costs!

We put together a strong cashflow statement and then we used that to make an educated decision analysing all of the facts.

Sometimes it can be a big business decision like this that can spur a business owner onto realising that he needs to monitor cashflow, however the businesses with the most chance of succeeding and ensuring steady, manageable growth will be the ones that see the value in monitoring their cashflow from the initial start-up phase.

It’s also imperative to continuously monitor your cashflow position on an ongoing basis. This will give you the insight to keep track of how strong your business is and how long it can survive if its income dried up and it only had savings to live off!

Research that Xero conducted in 2018 showed that 50,000 businesses fail each year due to cashflow issues ( we actually talk about the importance of this, especially for the building trade here).

Get your business on the right track and ensure that you have a sound, accurate cashflow system in place so that you don’t end up being one of those 50,000 businesses that fail each year.