How I Track My Business Cash Flow and Expenses

Today, I want to share some practical tips on how I track my business cash flow and expenses. 

As a business owner, you must keep your finger on the pulse of your business (the finances) at all times. You need to know how much money is coming in and how much money is going out each month. You need to know about taxes you owe, your company's debt levels, accounts receivable, etc. 

I’ve found that most small business owners don't do a very good job monitoring their company's books. Why? Because they are so busy "running" their business they don't get around to it. 

One helpful thing that I do is to keep a monthly profit and loss statement on a MS Excel Spreadsheet. I update my spreadsheet on the first of each month (for the prior month). I have my revenue and expenses broken down into categories (according to the Schedule C 1040 Form), to make things simple.

Once I update the spreadsheet, I know whether or not I made a profit that month. I also analyze each expense to see if there are opportunities to reduce or eliminate certain expenses. In all, I spend about an hour each month updating my books and analyzing my results. In my opinion, this is one of the most important business activities I do each month.

During the month, I keep track of all my business receipts in a drawer in my desk. On the last day of the month, I sort my expenses by category, place them in separate envelopes (for each category) and total the numbers. Finally, I input the information into my profit and loss statement in the Excel spreadsheet.

Sure, you can use software too, such as QuickBooks® or other small business accounting software. But, if you are just starting out, I recommend you keep things simple.

Additional Tips

If you're just too busy to do this yourself, you need to hire a bookkeeper. Don't wait until tax time to try to figure out where your business stands financially.  By that point, it might be too late. 

By no means do you need to use the same system that I do, but please find something that works for you and stick with it. 

Bottom Line

The bottom line is that small business owners need to know their business finances at all times.  They should know their income, expenses, profit or loss, cash flow, upcoming bills, debt, etc.  You by no means need to do it all yourself, but you do need to make sure it gets done!

About the Author

Chuck Holmes is an author, blogger, entrepreneur, network marketer and small business coach. He lives in sunny Florida. Learn more about his opportunity.


This article was published on 11.09.2018 by Chuck Holmes
Author's business opportunity:

HBN - Nutrition, Free to join
Join

Member comments:

No comments yet
Facebook comments:




OR


Copyright © 2015-2020 Gateway Solutions s.r.o.
SupportPrivacy PolicyAffiliate TermsTerms of UseTestimonials
Desktop / Tablet | Mobile