5 Ways to Avoid That Jittery State of Panic and Uncertainty About Cash

cash photoAs an entrepreneur, you’ll likely have experienced a state of uncertainty, if not outright panic, at some point about your business’ cash flow. During these times, questions like these keep us up at night:

  • How much cash is there in the business right now? Next month?
  • Is there enough in the account to take on another monthly payment?
  • What if that client pays late?

If these concerns sound familiar, you are not alone. Many small businesses are white-knuckling it on cash flow. In fact, a study from Dunn & Bradstreet revealed that 90 percent of businesses that fail trace their problems to cash-flow issues.

As a result of the lack of cash-flow modeling — a common practice in Fortune 500 companies with large finance departments, yet all but absent in smaller businesses — most entrepreneurs have no idea how to make important financial decisions around such actions as hiring an employee, buying new equipment or spending on marketing. Without numerous scenarios accounting for multiple “what ifs,” spending is largely guesswork.

And that’s not wise. Alternately, cash-flow modeling, projections and analysis give business owners the confidence to say “yes” or “no” to important business questions without the guesswork, and keep their businesses running smoothly.

Do you have the support you need to manage your small business bookkeeping? Schedule a 30-minute appointment to speak with a local small business adviser.