subject: 6 Tips for Small Business in Maintaining Cashflow [print this page] For the small business owner, maintaining accounts can be a bit of a nightmare. With so many chores in running the daily operations there may be limited time to go through the paperwork and reports. Paying accounts and allocating the required resources to debt recovery can also prove to be a difficult task, especially if this is not done in a timely manner.
There are some simple procedures that can be put into place to help maintain cashflow, keep track of outstanding debts and make sure the bills get paid on time. The following ideas are suggestions to assist in the daily running of any business and can be adapted to suit your individual circumstances.
Daily Tasks
Taking care of the daily tasks can assist in end of week and end of month procedures. For instance, invoicing customers as the sale occurs and daily banking (or at least preparing the deposit slip) will mean less time needed to tally everything up at the end of the week. Leaving everything till the end of the month will create a mammoth of bookwork that will be harder to tackle.
Maintaining a Filing System
The days of the shoe box filing system came to an end in the year 2000. With the introduction of the Goods and Services Tax and legislative requirements for reporting to the tax office came a need to get the accounts in order. Set up a filing cabinet or lever arch files for your accounts payable and receivables and file as you go. Keep small dockets and receipts in a pocket or envelope as soon as they have been recorded in the books.
Recording Transactions
Whether you are using a manual cash book or sophisticated software accounting program, it is imperative that you record your transactions on a regular basis. This can be a simple process and while details can be kept to a minimum the date, amount, reference number and reason for the transaction needs to be included.
Tracking Accounts Receivable
Keeping a watch on your accounts receivable is possibly the most important aspect of account maintenance. If you are still using a manual system of recording customer information make sure you know when a debt is due. Debt collecting is as fundamental to your business as making the sale.
Tracking Accounts Payable
Nobody wants to part with hard earned money but tracking your accounts payable and paying bills as they fall due makes good business sense and encourages a healthy credit rating. If suppliers are paid on time, your goods are going to be delivered on time. It is all part of the general cycle of keeping the business and cash, flowing.
Balancing the Cheque Book
Balancing the cheque book and reconciling bank accounts will give you up to the minute information on how you are travelling. Knowing your cash on hand figure gives you an advantage for making future plans and ordering supplies.
If you struggle with any of these regular chores it is better to call in someone to assist. Letting the accounts and paperwork build up can have disastrous effects on business while maintaining accounts on a regular basis will give you all the information you need to operate your business.
6 Tips for Small Business in Maintaining Cashflow
By: John Zukerman
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