Cash is king – Acumen Bookkeeping

Cash is king. I am not just saying this to attract attention but mean it through working with different small and medium enterprises. Many businesses failed because of poor management of cash, and Covid-19 was a testament. Your business can be profitable, but if you have a poor cash flow you are in trouble leading to liquidations and
ultimately shutting down the business.

You may ask what is cashflow, and a valid question indeed. Cash flow is the movement of money coming in and out of the business over a period. Poor management of cashflow can lead to many issues including:

• Unable to pay suppliers, thus affecting relation,s which may lead to less
  favourable terms of trade
• Affect growth, such as expanding operations or creating new products
• Expensive financing such as high-interest loans
• Reduced employee morale due to the inability to meet timely payroll obligations
• Can lead to insolvency and business failure
• Affects future growth as it forms the key ratio when applying for external financing e.g. banks, investors, etc

It is pivotal to track your cash flow, and the best way to do this is to have robust financial and bookkeeping systems. Systems like Xero enable forecasting in real-time and have built-in predictive models to forecast future cashflow which gives managers and owners of the business confidence if the business is heading in the right direction and what resources and expertise are required to move to a better
position.

At Acumen Bookkeeping, we can help you manage your cash flow by managing key data entry points so as a business owner, you can have reliable and informative information for decision-making. We are with you no matter what stage of business you’re in. Whether you’re just starting out or in a growth phase, we provide quality data to support your strategic decision-making.