Sales May Not be the Answer to More Cash Flow
All too many business owners measure their business results by their bank account. But if you’ve been in business for any length of time, you know that cash rarely equals income.
And even if you know how much income your business has, do you know how to read the results of your financial statement?
For most people who are struggling to get more cash flow from their business or to create a sustainable systemized company, they thing more, bigger, faster is the answer. And that’s like going to your mechanic for a sputtering engine and he puts more air in the tires. Sure, that is one solution for one problem (your tire pressure is low) but it doesn’t solve the problem you have.
If you want more from your business, sales may be the last thing you need to do. You can make a lot of money from a small business. And you can lose a lot of business with a big business.
When it comes to sustainable success in a business, size doesn’t matter.
What does matter is having accurate financial statements and knowing how to read them. There are four things you need to have to accurately understand your financial statements:
(1) You need a constant to compare against,
(2) You need to know what a change indicates,
(3) You need to know what the cause of the change was, and
(4) You need to know what to do to have more or less (as required) of that change.
This all starts with accurate financial statements. Do you have, right now, a financial statement that is less than 30 days old? If not, give us a call. We can help. Cash Flow Accounting http://www.cashflowaccounting.com/ is a virtual bookkeeping service that gives you the financial statements you need to make timely, smart decisions about your business.
http://www.cashflowaccounting.com/
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