It’s a phrase you’ve heard before: "Cash is king." For a small business, a healthy cash flow isn’t just a convenience—it's essential for survival. Unfortunately, managing it can feel like a constant battle.

The good news is, you don’t need an accounting degree to get a handle on it. Here are five practical tips you can use to improve your cash flow and keep your business on solid ground.

1. Separate Business and Personal Finances

This is the most fundamental rule of good financial management. Mixing business and personal accounts makes it nearly impossible to know if your business is actually profitable. Get a separate bank account and credit card for your business right away. This will also make tax preparation much easier.

2. Invoice Promptly and Follow Up

Don't wait to send an invoice. The moment you've completed a job or delivered a product, send the bill. Once it's sent, don't be afraid to follow up. Set up a system to send automated reminders for invoices that are 30, 60, or 90 days overdue. A little persistence can make a big difference.

3. Create a Realistic Budget

A budget isn't a restriction; it's a roadmap. It helps you see where your money is going and where you can make adjustments. Track your expenses for a few months to understand your spending habits, then create a budget to guide your future decisions. Review it regularly to make sure you're on track.

4. Monitor Your Financial Statements Regularly

Your financial statements are your business's vital signs. Make it a habit to review your Profit & Loss (P&L) statement and your Balance Sheet at least once a month.

• The P&L shows if you're making a profit or a loss.

• The Balance Sheet gives you a snapshot of your business's financial health at a specific moment.

Learning to read these reports will help you spot trends and make better decisions.

5. Automate Your Bookkeeping

Using software like QuickBooks or Xero can automate tedious tasks like bank reconciliation and expense tracking. Not only does this save you time, but it also reduces the chance of manual errors. Automation provides you with accurate, real-time data, giving you a clear view of your cash flow at all times.

Ready to take control of your cash flow? Our team can help you set up a system that works for your business.

Contact us for a free consultation.

When you first open QuickBooks, you might feel a little overwhelmed. There are so many options, but don't worry—getting started is easier than you think. The most important first step is setting up your Chart of Accounts.

Think of the Chart of Accounts as the filing system for all your financial transactions. It's the backbone of your financial records and will determine how your reports are organized. A well-organized chart of accounts will save you a lot of time and headaches later on.

What is the Chart of Accounts?

The Chart of Accounts is simply a list of all the accounts your business uses to categorize its financial transactions. It's organized into a few main groups:

• Assets: What your business owns (cash, equipment, etc.).

• Liabilities: What your business owes (loans, credit card debt, etc.).

• Equity: The owner's stake in the business.

• Income: Money your business earns.

• Expenses: Money your business spends.

Step-by-Step Tutorial

Here’s a simple guide to get your Chart of Accounts set up correctly.

Step 1: Navigate to the Chart of Accounts From your QuickBooks dashboard, click on the Gear icon in the top right corner, then select Chart of Accounts.

Step 2: Understand the Default Accounts QuickBooks already provides a basic set of accounts to get you started. It's a good idea to review them and see if they make sense for your business.

Step 3: Edit Existing Accounts Don't be afraid to rename accounts to fit your business. For example, if you run a creative business, you might want to rename "Office Supplies" to "Art Supplies." To do this, find the account in the list, click the drop-down arrow under the "Action" column, and select "Edit."

Step 4: Create New Accounts If you need an account that isn't already there, you can easily create one. Click the New button at the top of the list. You'll need to choose the Account Type (e.g., Expense), a Detail Type (e.g., Supplies and Materials), and a Name (e.g., Packaging Costs).

Step 5: Group Your Accounts For even better organization, you can create parent and sub-accounts. For instance, you could have a "Marketing Expenses" parent account with "Social Media Ads," "Print Marketing," and "Website Fees" as sub-accounts. This gives you a high-level view and a detailed breakdown.

Getting your Chart of Accounts right from the beginning will make generating accurate reports and preparing for tax season much easier.

Feeling lost? Our team is a QuickBooks ProAdvisor, and we can help you set up and manage your QuickBooks account for success.

Schedule a call with us today.