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How a Bookkeeper Can Help Your Cash Flow

Written by: John Stewart

Article Overview: Many small business owners struggle with keeping their bookwork up to date. Yet good record keeping is an essential part of any successful small business.How can you make an informed decision about your business if you don’t know where you are at financially with your business?

How a Bookkeeper Can Help Your Cash Flow

You may have an excellent understanding of your business, and can say that you have all the information in your head.

We recently had a client who knew his business so well, that he boasted one client accounted for more than two – thirds of his business turnover.

When we presented the figures, he was shocked to learn that the client actually accounted for less than a third in terms of income, and was actually taking up about 80% of his time.

The business owner had no idea of where his business was, he hadn’t looked at sales figures, had a vague idea about his pending orders, and was heading for collapse.

Yet he took no notice of our warnings, because he regarded the bookkeeping to be an unnecessary expense, and only wanted the minimum of bookkeeping services.

Six months later he closed the doors on his business, before the creditors declared him a bankrupt. So he lost his whole business for the sake of a few hundred dollars in bookkeeping fees that he regarded as an expense.

The issue is, not how much you are paying your bookkeeper, but how closely are you monitoring your cash flow? Do you instantly know how much money you owe people? Most business owners have a fair idea of what’s happening in their business - But do you know how much money other people owe you? If you cannot answer that question, then your business could be heading for disaster

When times get tough, the tough get going … well, that may be the case, but the “not-so-tough” sometimes get going too - Yes, they go straight to the wall! Belly - up, kapputt! Call it what you will.

Often the reason businesses fail is through lack of cash flow - If you don’t keep a tight reign on your cash flow, you could find that you have invoices outstanding for 60, 90, and even 120 days. Then by the time you go to chase up the debt, that business has closed it’s doors, and G O N E

By all reports, the global economy is certainly slowing down, cash flow has tightened, and we are seeing people taking longer to pay their bills

Now is the time to invest in a bookkeeper that can help you keep a close eye on your cashflow and help you through the next few months that are certainly going to be challenging for many businesses as the Banks tighten up their lending habits

Good record keeping should be the life-blood of your business, so ensure that you have a good bookkeeping system in place

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Article Tags: bookkeeper, bookkeeping services, business owner, business owners, business turnover, cash flow, collapse, creditors, disaster, doors, global economy, how much money, invoices, sake, six months, two thirds, unnecessary expense, vague idea



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