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3 Strategies for Business Cash Flow Management

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Many business owners are good at what they do but need assistance when it comes to staying on top of their business’ books. I interviewed a financial planner who had his own business and asked if he could give our readers  business cash flow management strategies.

Here are the strategies:


1. Pick a Simple Spreadsheet

When we  first started, I simply used an Excel spreadsheet to track our company’s expenses and cash flow. If you don’t have Excel, you can use either Google Docs or you can use OpenOffice. Tracking business cash flow doesn’t have to be a complicated effort. All you have to do is keep a running balance of money coming in and money going out so that you know at any given point what your balance is. I know several people who have used Freshbooks and are very happy with it. It’s the poor man’s version of Quickbooks, to me.

2. Set Up Your Own Spreadsheet                                                                                                                                                                                                       Setting up a spreadsheet can be as simple as having a few columns:

  • Date
  • Payee/Payor
  • Description (try to keep it in categories, like travel, marketing, etc.)
  • Deposit
  • Withdrawal
  • Running balance

I had nothing more complicated than this for the first couple of years in my previous company as we were getting off the ground. Once we got up to about a half million in revenues, we hired a bookkeeper to migrate the spreadsheet over to Quickbooks, but before then, I literally e-mailed the spreadsheet to our accountant and he did our taxes based off of the spreadsheet. If you find that your expenses are running higher than you think they should, then, assuming that you’re only using a few categories as described above, it’s not difficult to run a pivot table and see where the money is going.

3. Get a Bookkeeper
I think that people focus too much on systems and processes rather than the basics of balancing the checkbook and focusing their time on what’s really going to make the business go, which is getting sales and delivering excellent value for what your customers purchase. Once you get bigger and all of your time is focused on acquiring and servicing customers, you can always migrate over to something more nuanced and let a bookkeeper take care of it.

As you can tell from the strategies listed above, successful business cash flow management does not have to be a difficult process. You can quickly manage and evaluate your income and expenses. Knowing the numbers will help you to more readily make day to day decisions about your business.

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