What is cash flow?
The term ‘cash flow’ refers to the money moving in and out of your banking account over any given period of time.
For a business owner, managing your cash flow is a day-to-day operation. However, the best way to analyse and understand your spending capacity is by reviewing your incomings and outgoings on a monthly basis.
Cash flows both ways – into and out of your account
Incoming cash comes from clients purchasing your products or services. Outgoing cash covers expenses like rent, employee wages and the tools required to create the product or provide the service.
When more money is coming into your account than going out, it means you have a positive cash flow. This enables you to pay the bills and have some cash leftover to put towards business growth or staff perks. In other words, you’re making a profit.
Alternatively, when there is more money leaving your account than coming in, you will find yourself in a negative cash flow situation. This can lead to your account being overdrawn and your business ending up in some serious debt.
How does cloud bookkeeping help?
So cash flows in both ways, we get it. But how can cloud bookkeeping help?
From monitoring your daily transactions and tracking all expenses in real time to analysing and reporting on monthly cash flow, cloud bookkeeping can help business finances exponentially.
So cash flows in both ways, we get it. But how can cloud bookkeeping help?
From monitoring your daily transactions and tracking all expenses in real time to analysing and reporting on monthly cash flow, cloud bookkeeping can help business finances exponentially.
Monitors your transactions
Manual bookkeeping requires you to match all outgoing payments with their associated receipts. However, with the power of cloud bookkeeping, you won’t have to worry about this!
Why? Because the online portal does it for you. Safe, secure and smart, a cloud bookkeeping tool like Xero can monitor all of your transactions, notify you of any discrepancies and keep your payments on track – without you having to worry about keeping tabs on paper receipts.
Keeps you on track with any debt repayments
Because growth can often mean taking risks and borrowing money, debt is quite common in business. And as long as you manage it well, it doesn’t have to be a bad thing!
Cloud bookkeeping provides you with all of the information and tools you need to get on top of your debt and move towards a debt-free business model.
With cloud bookkeeping, you can track your debt repayments, pay off loans in a timely fashion and be advised on how much debt your business can handle.
Reports on your monthly cash flow management
Cloud bookkeeping enables you to perform monthly financial reports. Having the ability to review your spending and see where every dollar is earned and spent allows you to better prepare for the future.
Using records from your financial spending history as well as any forecasted earnings, cloud bookkeeping can help your business to balance its finances wisely and be smart about growth.
With cloud bookkeeping, managing your cash flow is easy
Managing your cash flow with cloud bookkeeping is an easy and effective way to track, monitor and take ownership of your business’ outgoings and incoming.
Do you want to move your accounting to the cloud? Talk to our team today
