Before you take any action in your Hillsborough business, it’s essential to have a clear look at your cash flow first. From hiring additional staff to expanding your location, knowing how money enters and leaves your business lets you know more than just how much you have right now, it also gives you a snapshot of the shifts and changes that your business goes through all year long. By knowing how income and spending change during the year, you’ll have a clearer understanding of the amount of cash you’ll have available at any point throughout the year.
Our experienced team of accountants can look at your cash flow management as just one of the many financial services we offer small businesses. At C.E. Thorn, CPA, PLLC, we can keep you aware of any changes in how money is moving into or out of your business accounts, giving you the confidence needed to make choices for your business.
By knowing whether you have a positive cash flow due to increased income or a negative cash flow that’s indicative of excess expenditures, you’ll have the clarity you need to plan for your business’s future and make decisions that reflect your financial status.
It’s important to know that profit and cash flow are not the same thing. Your profit is the amount left over after all the expenses, payroll, and taxes are taken out. Your cash flow is the continued look at how money is moving in and out of your business.
How you track your cash flow gives you a look at trends in your finances and allows you to know vital information, including:
By having this information, you are more likely to be successful in pursuing a business loan or line of credit. More importantly, it can help you head off potential cash flow problems by being able to plan well in advance.
While your business will always have money coming in and money going out as you sell goods, collect payments, or pay others for products or services, you will see times when there will be peaks of higher income and peaks of higher expenses. Your Hillsborough business will benefit by knowing when your peaks and valleys are more likely to hit so you can prepare in advance.
To help you prepare, we offer cash flow monitoring and can help you determine the causes and reasons behind increased expenses or decreases in revenue. Whether it’s the effect of seasonal changes or other factors, our team of experienced accountants can help you recognize and fix problems.
Analyzing the cash flow of your business doesn’t have to be a source of stress, and it’s important to know that once you are aware of problems or concerns, you can take steps to fix them. To reduce costs, look at these four areas that are often the source of your biggest expenses or reduction in income.
At C.E. Thorn, CPA, PLLC, we can help you set a realistic budget and cash flow strategy for your business. To speak with a leading small business accountant, call us today at 919-420-0092 or complete the online contact form today.