Archive / 3.3 Cash Movements

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One very important ratio to follow

Guess what’s a very important ratio to follow in your everyday business? It’s not so much a ratio, but a number. It is equally important however and ensures you will not run out of funds to manage your business. It’s your planned net cash flow. Obviously it should be positive, right? Well, if it is […]

When is negative working capital okay?

Negative working capital is a mathematical result when comparing current assets with current liabilities and the latter exceeds the first in number. That is you’ve got more liabilities than you’ve got assets to cover those liabilities in the next coming 12 months. When thinking about it, negative is never a good thing. At least that’s […]

Cash flow management when you have longer agreements

Yes, you who has signed a longer term service agreements, you need to consider how you manage your cash flows before you sign off the agreement. It should be obvious without saying, but as it happens, it’s not done often enough and not with careful enough consideration. Just to give an example:  (more…)

Completion method versus cash flow management

You provide a service over a longer period of time and as it is, you’ve set out a payment schedule in your agreement. Now, in your accounting you use the completion method for determining receivables, sales and payables. We’ve talked about completion method and accounting that’s related to it separately, but what I want to […]

How to best manage your bank account?

As the main resource you generate with your business, is money, you want to make sure everything is in order when it comes to having an overview and managing your money. There are a couple of real life best practices I for one have in use for my own personal finances and have seen being […]

Are your bank payments authorized?

Ever since you’re taking yourself an accountant or you’re outsourcing accountancy alongside with bank payments, you have to ensure that the cash outflow is authorized. All payments done should be authorized obviously by none other than you, the manager or owner of the company. Generally speaking, already in medium sized companies, if there’s an accountant […]