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Cash Flow: Cash Is King!

Andrew Jeffers | February 20, 2018

Have you heard the expression - Cash is king?

How about this one, “Sales is vanity, profit is sanity and cash flow is reality.”

What is the common denominator of both of these expressions?

Financial resources are essential for your business.

In simpler terms:

Positive cash flow will keep your business going
Insufficient cash will cause your business to go bankrupt

Let’s take a closer look at what constitutes your business' cash flow and how you can manage it efficiently…

Cash flow, sanity, reality…

A simple definition of cash flow would be - all the incoming and outgoing of cash in a business.

When it comes to the flow of your business’ cash, one of the most important things is understanding it.

I need to warn you, though: every business has its own share of financial fluctuations. As a business owner, you’ll sometimes need to make some tough decisions.

For example, when business isn’t going well, you’ll have to make the necessary budget cuts to get your financial assets up and running again.

But here’s another way to think about your business' financial assset:

Imagine you’re a greengrocer going to the market every morning. You spend $1,000 on produce - that’s $1,000 gone out. But you’ve managed to sell all that produce in your shop that day, so you make $2,000. At the end of the day, your business’ cash flow is $1,000.

Does it make sense?

Let’s say that by the end of the week, a good grocer knows whether they’re going to a restaurant or a pub for dinner.

You might also be interested in: Why Is It Important To Choose Your Business Structure Wisely?

Cash flow management 101

I am going to give you the basics of what your financial asset management should consist of, on a regular basis.

Here’s where it gets interesting...

In my opinion, your business’ finances should be managed daily.

You should keep track of a few basic elements, like:

How much money is in the bank
What’s going out/coming in

Being organised with your financial asset management will keep you up to date with all financial transactions. It will also help you run your business and your cash flow effectively.

I can assist you in making the right decisions when it comes to your business. Whether you have questions about cash flow management or company set up, I am here to help. Let’s get in touch now.

About Me

Andrew Jeffers

Current Rating: 4.88 / 5
Sydney, New South Wales
0423 308442
A lot of accountants offer financial services. Of course, Shuriken goes beyond that. Shuriken is at the forefront of accountancy, providing clients with a broad range of services, coaching and mentoring. Here you can connect with experts who understand what is important to you: building your business and helping you grow.

To add value, we have four client-focused divisions:

Shuriken Digital offers a comprehensive range of services covering online branding, reputation management, digital marketing and advertising which are fully customised to help our clients engage their audience, manage their online presence, build powerful brands and achieve their goals

Shuriken Wealth is a high-level service combining financial and investment advice, accounting and tax services, retirement planning and legal or estate planning to help our clients create and manage their wealth by guiding and monitoring their financial situation.

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Shuriken International provides soft landing services to overseas businesses that want to set up in Australia. Our services cover everything from tax advice, recruiting staff, licence issues, setting up an office and even finding a home.