When your OUTGO exceeds your INCOME, then your UPKEEP will lead to your DOWNFALL!
That’s an old saying, to be sure, but one that bears repeating throughout one’s life as well as the life of your business. The lifeblood of every business is its “cash flow”. If your cash flow is not adequate, your business cannot succeed. Therefore, it stands to reason that part of your responsibility as an entrepreneur is to understand how to properly manage your cash flow.
After all, if some business owners or managers see that they have more money in their cash drawer at the end of their day than they had at the beginning, they assume that they made money from their day’s operation. To believe that profits have been earned whenever your daily cash drawer shows an increase is an incredible mistake. Daily income does not always translate to daily profits.
Unfortunately, in the long view, thinking that way will push your business into bankruptcy faster than you can imagine.
In the course of any business day, even when you have fresh sales, you will also have ongoing expenses. Don’t neglect those persistent, yet often unseen, costs that every business incurs each and every day. When business people fail to keep their eye on these daily expenses and adjust for them accordingly, their business will quickly end up in serious trouble.
The good news is that by having a more discerning eye, every business can become much more profitable with very little additional effort. Business owners who monitor exactly how their accounting systems work will be able to control these “hidden” costs.
Whether you keep your own business books or have someone else do them, consider both sales and expense figures and how they vary from month to month.
By monitoring and properly responding to your accounting reports, you can build not only a vibrant and active business but one that will have a positive future.
This article was written by SDK Hunter Consulting Group
About The Author:
Sherman Hunter and SDK Hunter Consulting Group staff consultants provide global moneymaking opportunities and proprietary strategies that quickly accelerate business activity. You may familiarize yourself with these unique concepts by visiting the SDK Hunter Consulting Group blog located at: https://sdkhunter.com
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