In my work with small businesses I am familiar with how cash flow management can make-or-break a company. Simply stated, if you aren't properly managing the flow of your money, then you are setting your business up for failure. In this time of COVID-19, managing cash flow is more critical than ever. A new commitment to cash flow planning and management is needed.
Even in normal times many business owners run into problems with cash flow. 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. During a shutdown reduced income is a reality.
Accountability, transparency, and planning of business and personal financial activity will be critical to protect your small business investments. Projecting the results of reduced income, even if temporary, will guide changes in spending priorities, billing, and business model. Up-to-date cash flow projections are necessary to quantify those changes.
One of the best things that you can do is contract your accounting services. A small business accounting firm that offers CFO services will conduct a cash flow analysis of your funds so that you take a proactive approach to controlling your cash flow. 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.
Let me know when you would like to talk. As planners, we are here to assist you in navigating simple solutions.
Stay safe, stay well, and stay tuned,
Charles and the Myrick CPA Team
If you want to achieve long-term financial success with your small business, contact us to learn more about the small business accounting services that are available. We work with clients located in the Washington DC area, and we also offer virtual business services for clients located anywhere. Contact us today to learn more: (202) 789-8898