Cash flow Management is the blood of any organization for mesure of its financial health. According to a study performed by U.S. Bank, 82% of businesses failed to owe to poor management of cash flow.
Business is continually spending more than it earns, is creating a cash flow crunch that will only result in closure in the long run.
For small businesses, cash flow management becomes an important aspect of is avoiding extended cash shortages. This is caused by a large difference between cash inflows and outflows. A business needs to keep afloat by paying bills and creditors.
But how can you keep track of all this and still manage your leads and generate business along with quality in product and service? The answer is simple – Automate. JDK Accounting brings the experience of various automation software and techniques to personalize the requirements of your business. Cash flow management requires working capital management to be implemented and automated to ensure cash flow can be looked at correctly. Online Bookkeeping services helps you in manage your business financial services.
Invoicing customers is easy, but ensuring they can pay is a challenge. Many firms might be in expansion mode or in a downturn – both phases where cash is not readily available. However, you as a business need to shorten your conversion cycle. This analysis will lead you to either take a short-term loan or debt from a bank or other sources. This will cost you interest, which can be high or low depending upon the economy and your terms as well.
An automated system can warn you much more in advance of the appropriate level of cash in your organization. Further, periodic reporting under (IFRS) International Financial Reporting Standards dictates all types of cash and cash equivalents to be reported in a set format. There are two set formats – and consistency should be maintained in preparation. Direct method – it is based on cash receipts and payments, and the second method Indirect method -here, profit or loss is adjusted for the effect of non-cash adjustments.
All these cash flow processes need to be carefully recorded and analyzed to give a systematic flow of the transactions.
JDK Accounting will not only streamline your financial your cash flow finances but also give you accurate information on the level of funds available. This will help in planning your working capital management, and you can plan your asset-liability management as per daily operations.
Contact us here for Business financial services including with Accounting, Bookkeeping, Payroll and much more