When you’re a business owner, you need to know and understand your income and expenses. Perhaps you don’t need to be the only one involved in your bookkeeping and spreadsheet information, but you do need to run your business like a business and that means knowing your cash flow and what it means to your business success.
Fiscal sense is crucial to your business moving forward. Fiscal sense is also an important part of proving to the IRS that you are, in fact, a legitimate entity. There are three things you need to be aware of when it comes to money management and they are:
Responsibility — you need to know who is responsible for the business and its cash flow. You need to know whether you can handle the bookkeeping and accounting needs or if you need to delegate that responsibility. You need to know who is accountable for which of the company funds, for what purpose and you need metrics in place to track the cash.
Resilience — you need to be able to bounce back from a financial set back. This could mean that you have enough operating cash flow to get you through a tough month. You should be working with your financial advisor to assure your cash flow is there to pay the bills and keep the lights on.
Reflection — take time monthly to reflect on your business cash flow successes or those areas in which you need to make some changes in order to keep moving forward with a positive cash flow. Your business budget is not a one-and-done it is a living, breathing document.
How well-versed are you with your business’s money management?