New ATO Client-Agent Linking Process to Authorise Your Chosen Tax Professionals
24 Oct 2023
Do you understand your business's cash flow and why it’s so important?
Understanding business cash flow is essential because cash flow is a critical aspect of assessing and managing the financial health and sustainability of the business. Cash flow management is an integral part of professional small business bookkeeping, and here at More Bookkeeping, we have expert Xero advisors on hand to help your business prosper.
Many business owners either ignore financial reports altogether or only take notice of the profit and loss report. However, to get a good picture of your business's financial wellbeing, you need to review the profit and loss, the balance sheet and the cash flow position reports regularly.
Your business may have periods with negative cash flow yet remain profitable overall. Many businesses have cycles or seasons of tight or negative cash flow, which can be very stressful if you haven't planned for it – yet with foreknowledge of your financial position, you can plan accordingly and sail through challenging cash flow periods.
Some businesses fail not because of problems with profitability but because of poor cash flow management. We find that many business owners often operate in a state of unnecessary struggle. But with some assistance and understanding of cash flow issues, they can streamline how they manage business finances and reduce stress, making business more enjoyable.
Benefits of Understanding Your Business Cash Flow
In general, understanding your cash flow allows you to make better financial decisions by having the confidence that you know exactly how your business is performing.
When you understand your cash flow, you are no longer guessing or hoping for the best but can plan with accurate and current financial data to guide your plans and goals.
Talk to us at More Bookkeeping Xero Advisors about how we can help you get ahead in business. We can help manage accounts payable and receivable, plan for liabilities, and give you monthly reports that will clarify your financial position and make running your business easier.
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