Cash flow is the lifeblood of your business, the true source of its longevity and triumph. Just like a superhero needs energy to perform extraordinary feats, a profitable business requires a steady stream of cash to fuel its operations and conquer daily expenses.
This triumphant trio will help you build a cash flow budget that conquers financial challenges and secures the future of your business!
1. Timing
Think of your cash flow budget as your trusty sidekick, not a 'set and forget' relic. You have the power to shape it on a monthly, quarterly, or yearly basis, depending on your needs.
As your business grows or your financial landscape shifts, maintain a vigilant watch over your budget. Keep an eagle eye on how you're cruising through the financial cosmos and, if necessary, perform a budget update mission.
Beware of the super villains lurking in the shadows – significant disparities between your budgeted figures and your actual results. These anomalies might signal trouble, so stay alert!
2. Costs
Capture all your costs, both fixed and those variable too. From rent to insurance, utilities to advertising, internet to wages – consider them your arch-nemeses. Equip your financial utility belt with everything, even taxes like PAYG instalments and goods and services tax. With your expenses in check, you'll be ready to face any financial showdown.
3. Income
Begin by estimating your incoming wealth, your expected income. As your journey unfolds, keep updating your cash flow budget to track the balance of income versus expenses.
Once your business has matured and you've embraced your financial superpowers, you'll gain a clearer vision of your expected income. But remember, in the unpredictable world of business, it's wise to don the cloak of conservatism. Being cautious with your income estimates can provide the flexibility you need when facing the unexpected.
This data can just be a click away when you have optimised your technology. We can work with you to set up access to real-time, accurate insights, anytime, anywhere.
As your trusted accountant, we will help you unlock your full financial potential.
Got questions? Give us a call on 07 5500 0898 or email info@mjmaccountants.com.au
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Source: Manage your business cash flow