3.Are you waiting for your bookkeeper or accountant to tell you your cash flow position?
This is probably the worst mistake of all because it means that you could find yourself waiting weeks or months–with little or no money in your business bank account to pay bills or payroll. This is madness!
Every small business owners should be able to print a profit and loss (P&L) and balance sheet statement today and calculate cash flow right now. It’s not hard to do and the entire process will take less than 15 minutes.
Why Cash and Cash Flow are Not the Same
The important thing to remember is that cash and cash flow are not the same thing.
If your company is profitable on paper yet it maintains a negative cash flow for an extended period of time, eventually it will go under. Being able to calculate and monitor your cash flow position regularly is critical to your company’s health and survival. You can have the most brilliant product or service, but if you don’t have positive cash flow, your business will eventually go under.
If you want to learn how to calculate your cash flow quickly and easily, I recommend that you check out Chapter 1 of Financial Foreplay. It’s been endorsed by the most recognized accounting software brands in the world and it can help you get on top of your numbers and whip your business into shape today.
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