Far too many business owners make financial decisions based on their bank account balance. But that figure is constantly in flux. It only represents the funds you have at that moment but not the funds that will soon enter and exit your bank account as you pay your expenses and revenue is received. Instead you should base your decisions on your business’s cash flow – the figure that accounts for the funds you have at the moment, in addition to the funds you will eventually pay and receive.
Bills are easy to handle since it’s up to you as the business owner to pay them before their due dates. But in order to have the necessary funds to pay your expenses, you need your clients to settle their invoices in a reasonable time frame. Collecting your revenue in an efficient and timely manner is the key to maintaining a healthy cash flow.
Here are five tips for getting your invoices paid faster and keeping your cash flow strong:
You’ve heard it time and time again: “Accurate bookkeeping is necessary for business health.” This isn’t meant to come off like a scolding finger-wag. Bookkeeping is simply a foundational aspect of running a business and should be regarded as such.
Bookkeeping and accounting are inherently different, though the two practices share similar implications.
Accountants typically focus on preparing and processing statutory returns, giving advice on legal structures, and offering their expertise on general finances.
Bookkeepers, on the other hand, tend to focus on maintaining financial organization, recording and reporting on business transactions, and providing detailed statements that reflect the health of a business. Bookkeepers have been expanding the scope of their expertise to include things like developing and reviewing internal business processes and employing other technologies like document management and inventory control to improve overall business efficiency as well.
When you work with a seasoned bookkeeper who knows the ins and outs of accounting software, you’re able to hand off the financial grind over to the pro and focus on doing what you do best – running your business.
So, why should you care if your bookkeeper works with the latest accounting software technologies?
As a small business owner, it’s important to learn how to work smarter, not harder. Assess what your day to day looks like. What aspects of your business are eating up most of your time? Which manual tasks can be simplified with technology? From accounting and bookkeeping to hiring and training employees, there’s a software or app that can reduce the time spent managing everyday business activities.
HERE ARE MY TOP FIVE APP RECOMMENDATIONS TO BE A MORE EFFICIENT BUSINESS OWNER
Fact or fiction: Accountants and Bookkeepers do the same thing
A lot of people think CPAs and bookkeepers perform the same job, but actually, there are quite a few differences between bookkeepers and accountants.
The easiest way to differentiate the two professions is to think about it like this: