Your Guide to Mastering Cash Flow in Your Small Business
Managing your small business finances can seem like a precarious balancing act between invoices-in and expenses-out. But you can conquer cash flow in the short term to set yourself up for long-term growth and success.
In this eBook, you’ll learn:
What cash flow is and why it matters
How to keep track of cash flow
How to manage income and expenses
Determining Cash Flow Using a Profit & Loss Report
One of the most common ways to track your cash flow over a specific period of time is by using a Profit & Loss report.
Here’s how to calculate your Profit & Loss:
Income
This one’s simple and straightforward, especially if you have a steady stream of clients. It’s the total of all invoices paid to your business within a specified period of time, as well as any other income.
Taxes
Always set aside a percentage of every payment you receive for taxes. In general, 20% should cover it, but check with your governing tax agency to be sure.
Expenses
This is the total of all purchases you made for your business in a specified period of time. Only money you spend on your business should fall into this category.
Learn everything you need to know about FreshBooks
Get the GuideWhat to Do When You’re in the Red?
Increase Income
See if you can take on more clients and/or bigger projects to get you into the black and beyond.
Trim Expenses
Critically evaluate where you are spending more than necessary and pare back in those areas.
Raise Rates
As costs of living rise, so should your rates. Other factors to consider: Your experience, market rates and more…
