If you are not making cash flow statements every week your business could be in jeopardy. I say this because cash is what keeps a business afloat. A cash flow statement doesn't have to be fancy, but it has to project your cash position day to day, for the next week, month and even longer.
Making a cash flow statement can be a very simple procedure, you can do it in Excel or even in Wordpad. At least every week look at how much money you have in the bank, include any cash on hand as well. This gives you the cash balance in the short term. In addition, the amount of income coming to you for the next week. Then you subtract the expenditure for the next week, including bills, rent and payroll. This will give you an expected cash position at the end of the week.
I suggest doing it at least twice a week, but it is better to do, every day. I would not really be surprised by a lack of liquidity. There are a number of monthly payments to influence the reallyCurrency as wages, leasing payments, payments to suppliers and insurance benefits. Of course you may know, every month or more, but you must manage your money, make sure you always have enough to cover all costs.
Why is it important for a business? The budget was able to prove that you are more to come, but unfortunately the costs that are not unique for the entire month.
For example, you have five employeesweekly pay and to make weekly payments to the vendor. This is not a problem, cover the whole time. But what happens when you add rent to the equation once a month? You have enough to cover the cost to all three. If you're not careful, your money, which shall be in a bad situation.
If the students close tabs on your money, you can expect cash deficits before they jump on your turn, give the opportunity to create solutions for themSituations.
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