Cash Management Secrets

Proven cash management strategies that improve cash flow, collect past due money, and increases profits in tight credit markets.

Your Money Best Friends

Do you know the three most important reports you'll ever use in cash management? These reports are your money's best friends in all areas of business finance. What reports am I talking about?

First, these reports aren't fancy. Unfortunately many business owners, even fewer sales and marketing professionals, review these reports too infrequently. Yet they tell all about the health of your businesses economic condition.

What are these reports? They are your income statement, balance sheet, and cash flow.

You're probably not impressed. These reports are basic to the whole world of accounting, but remember, this isn't a site about accounting, it's about cash management. If you want greater wealth in your business and the flexibility that comes with knowing your numbers, then you need these three reports.

The income statement tells where your income is coming from and where it's going. It talks specifically to the profit and loss of your business by showing specific categories over a period of time.

Your balance sheet outlines your financial position, identifying your assets and liabilities over a period of time. The result of this report is your net worth, in many cases representing your liquid position in the business.

Finally, your cash flow statement shows your resulting cash position after all cash transactions for a specific period. This report also covers any cash activity from financing or investment activities. A cash flow statement can also be used to project your cash position (true liquidity) over time.

In another article you'll learn how frequently you will create and update these reports. Right now, grab a copy your income statement, balance sheet, and cash flow statement, these are the greatest tools in your cash management arsenal.

Posted by Justin Hitt on December 28, 2007 11:02 PM | Permalink

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