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Ask an Adviser - Cash Flow Tips For Beginners In Small Business

Q&A Small Business, Budgeting 29 Sep 2017

I've been running a small business for a year now but I have trouble keeping a record of my cash flow. Are there any easy cash flow tips for beginners like me?

2 Answers

Vote Answer

1

Hi Tara,

Thank you for your question about some tips for monitoring/recording your business cashflow.

I am not sure how conversant you are with technology and using apps either on a phone, tablet/ iPad or computer. I will assume that you do have some knowledge of computers and the internet.

There are various solutions to enable you to keep a track of your business cashflow as well as personal spending.

The Australian Government have a website to help small business owners and one of the areas is Cashflow and providing a template for a cashflow statement for you to use.

The link to their website and area where you can find information on cashflows is:

https://www.business.gov.au/info/plan-and-start/templates-and-tools

You will find other useful information on this website that may assist you with your business as well.

The other easy way to keep an eye on your cashflow if you use a smart phone or tablet may be to use one of the apps that will link to your bank account and/or credit/debit card and they will track all your transactions and provide you with a summary of your spending and income. You may even have the ability to customize invoices, run reports. The reputable apps are always 128 bit encrypted and totally secure. You can go in and categorise transactions and set up budgets as you need.

Some of the more popular apps which provide this functionality are:

  • QuickBooks where you will subscribe to their service and pay anything from $11.55 per month upwards depending on the number of employees you have. Link is https://www.intuit.com.au/small-business/
  • Pocketbook – free app but has limits with available banks that you can link to your phone or tablet, check the app to see which banks are participating in the data feeds allows you to budget and track your spending and income – more for personal use.

These are only some of myriad of available apps that you can use but I have found the above work well and have had no problems with them.

General Advice Disclaimer
Note: This advice is of a general nature only and does not take into account your personal situation and all of your objectives, your financial situation or needs. Before making any decisions you should seek advice from a professional, qualified financial adviser.
Neil Evans
Neil Evans Quadrant Financial Planning

Adv Rating 100% Cust Rating 97.22% Reviews 77

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Vote Answer

0

Hi Tara,

The fact that you are so keen to track your cash flow is a very good sign and an indicator of future success.

The best way to do this is to find a cloud-based software package (Xero and Moneysoft are good examples of paid subscriptions but there is also Pocketbook available at no cost) and set up the categories you want to track. It’s pretty simple and very effective.

It’s even more valuable to link your cash flow tracking to a projected pathway. You could create two scenarios and then track the actuals against each or the one you most want to be your reality. Give the scenarios meaningful names like, “Life is as it seems” or “It’s a perfect summer”.  

It’s a bit like when you fly overseas – there’s a flight plan and then a flight path. What’s important is to know how far away from the original plan you are at any time. Have a look at our website if you want to read some case studies in which we used this technique.

I would suggest making it a weekly habit to ensure you’re up to date with transactions.

Good luck.

Justin

General Advice Disclaimer
Note: This advice is of a general nature only and does not take into account your personal situation and all of your objectives, your financial situation or needs. Before making any decisions you should seek advice from a professional, qualified financial adviser.
Justin Hooper
Justin Hooper Sentinel Wealth Management Pty Ltd

Adv Rating 90% Cust Rating 98.86% Reviews 10

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1 comments

"Agree with Justin. I found making it a weekly habit helped me keep track of income and outgoings. Setting up a spreadsheet is the hardest part - but 10-15 minutes work at the end of the week is all it takes. Doing a monthly reconciliation also made BAS time a lot easier in my case as well."

David Kay 16:02 on 29 Sep 17

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