Date post: | 28-Jan-2018 |
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Cash flowIs the amount of money coming in and out of your business.Cash usually comes from selling your goods and/or services.The cash is used to maintain business activities, like paying formaterials to make your products, employee wages, rent andother operating expenses. It is the main indicator that your
business is doing well.
PAUL MARTIN CHARTERED ACCOUNTANT WWW .PMARTINCA .COM
HOW DO YOUGET MORECASH
COMING INTOYOUR
BUSINESS?
EASTWAY UNIVERSITY OF HUMANITIES WWW .EUSS .EDU /EIPA
PAUL MARTIN CHARTERED ACCOUNTANT WWW .PMARTINCA .COM
Save at least enough cash that would cover 90 days' worth ofyour business expenses to cover any unexpected events likenatural disasters, market fluctuations, poor economy, illness, andmore.
Tip No. 1 - Have cash reserves
PAUL MARTIN CHARTERED ACCOUNTANT WWW .PMARTINCA .COM
Debts are not good for your cash flow. If you have debt, make it apriority to pay it back as soon as you can. As much as possible,
avoid acquiring unnecessary debts. If unavoidable, make surethat paying that debt is your number one priority.
Tip No. 2 - Avoid debt
PAUL MARTIN CHARTERED ACCOUNTANT WWW .PMARTINCA .COM
Your net margin should be above 10 percent to have a healthycash flow. If it is below that margin, then you need to reassessthe status of your business and identify where you are fallingshort.
Tip No. 3 - Set a target margin
PAUL MARTIN CHARTERED ACCOUNTANT WWW .PMARTINCA .COM
Pay yourself a reasonable wage. You deserve it. And don'tunderpay yourself. This can affect your personal finances. Also, ifyou can't pay yourself enough, it only means that you are notconfident in the ability of your business to make a profit.
Tip No. 4 - Pay yourself
PAUL MARTIN CHARTERED ACCOUNTANT WWW .PMARTINCA .COM
If you have a good cash flow, you will be able to save enough forcapital investments and/or expansion, so always aim for this. Thisshows that your business is in a good financial position and thatyou are using your cash effectively.
Tip No. 5 - Go for capital investments
These cash flow goals can helpyou to plan for the growth ofyour business. Depending onyour business strategy, you mayidentify from these goals which
to prioritise.
PAUL MARTIN CHARTERED ACCOUNTANT WWW .PMARTINCA .COM
Need help to establish good cashflow management practices?
CONTACT OUR TEAM OFCHARTERED ACCOUNTANTS IN AUCKLAND ON
(09) 576 4166
PAUL MARTIN CHARTERED ACCOUNTANT WWW .PMARTINCA .COM
We also offer thefollowing services:
Annual Accounts, Tax Returns,
and GST
Online Accounting
Business Planning and
Development
Rental Properties, Trusts, and
more
PAUL MARTIN CHARTERED ACCOUNTANT WWW .PMARTINCA .COM