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The average rating for Bark Bookkeepers is 4.89, based on 154,756 reviews
5/5
based on 154,756 reviews
Cash flow is the lifeblood of any business. The goal is to have a balanced cash flow so that enough profit is coming into the business to cover your expenses. But when your profits start to slide it can be a worrying not to mention stressful time for any business owner.
However, if you take steps to manage your cash flow effectively you can ride out any little bumps in the road. Or better still, avoid them completely!
Here are our top tips on how to manage your cash flow to tell you more.
Recording every penny that comes into and leaves your business is the best way to track your expenses. Bookkeeping isn’t a legal requirement. However, it’s the best way to get an accurate view of your biggest profits not to mention losses. Plus, it will give your accountant the best chance at being able to help manage your cash flow, by creating a profit forecast. They’ll also require your books to be able to complete your tax return too.
One of the best tips for bookkeeping is to start early and be consistent with it. Be sure to document every transaction and receipt, so that you pay the right amount to HMRC. From a cash flow point of view, your books are going to give you the first clues that something isn’t adding up. So it pays to stay on top of them, even if that means outsourcing yours to a professional bookkeeper instead. Find a Bookkeeper near you.
Just like how you manage your personal finances by creating a budget, the same ethos applies to your business cash flow too. To keep your head above water, you need more money coming into your account than what leaves it. Things you may need to budget for include rent, payroll, bills, supplier costs etc. Knowing how much all of this costs will allow you to work out how much needs to come into the business to cover it, and generate a profit at the same time.
Creating a budget sounds simple, but it’s so easy to forget this step especially if you’re new to entrepreneurship. When it comes to managing your cash flow, you can’t spend blindly otherwise the business will fail and you’ll be left heavily in debt. Instead, you need to take a proactive approach to working out your costs and figuring out a contingency plan should expenses run over.
It’s normal for cash flow to dip and peak depending on the time of year, or even due to the promotions you are running. But, the last thing you’d want to do is ignore worrying patterns of loss. Your cash flow needs to be fairly consistent throughout each month. Or, if one month does exceptionally well (such as in the run-up to Christmas), then you need to financially plan how to manage in quieter months.
There are lots of ways you can bring your business back from the brink, but you need to do this sooner rather than later. For example, by cutting expenditure or finding new ways of generating profit. Your business may also be eligible for grants, discounted rates or a business loan. Sadly, 60% of small businesses fail, and poor cash flow is undoubtedly one of the main reasons for this. But by acting fast and taking the right steps, your business can avoid the same fate.
When you get to grips with your cash flow, you can build a more resilient business that can withstand the challenges that might get thrown at it. To do so, you need to have an effective bookkeeping system in place. From there you devise the right strategy to overcome any hurdles with your cash flow, so that these don’t derail your business altogether.
The average rating for Bark Bookkeepers is 4.89, based on 154,756 reviews
5/5
based on 154,756 reviews
Need to hire a bookkeeper for your business but confused about costs? Read on to find out how much you’ll pay for a Bookkeeper in the UK based on the nature of the service and the size of your business.
