Cash flow management can make-or-break a company, and if you aren't properly managing the flow of your money, then you are setting your business up for failure. If you want to achieve long-term success with your company, then you need to make sure that you have cash available at all times.
Why is Cash Flow Management so Hard?
Many business owners run into problems with cash balances, and they have a hard time finding their way out without leveraging a lot of credit. A typical scenario is that bills and invoices need to be paid right away, but the incoming money is delayed because of production costs and other factors. Even if you know that you will be able to sell the product in the future, it might be hard to keep the business afloat until that happens.
The main reason that business owners run into cash flow problems is because they are running on a short-term mentality with their spending. They look at the money that is currently in the bank account to make financial decisions, instead of considering the bills that will be due and the money that will be coming in. You need to examine the profitability and success of the company, and compare both accounts payable and accounts receivable before you start making significant financial decisions.
How Can Accounting Services Help?
One of the best things that you can do is hire an accountant to help with the management of your funds so that you take a proactive approach to controlling your botton line. A CPA will be able to help you look at monthly, quarterly, and annual reports so that you can actually see how much money you have brought in and the anticipated profits in any given period. This information will help you manage cash flow by using better financial decisions so that you aren't spending more money than you have available.
For accurate record-keeping and reporting, cash flow management, and support on initial accounting setup, contact Charles P Myrick, CPA. Recognized as one of Washington DC’s top accounting firms for small businesses, we can help set up the systems that will move your small business to success. (202) 789-8898