Visual representation of small business financial literacy - decorative

Module 3: Cash Flow

Key Takeaways

  • A balance sheet tells a compelling story. A cash flow statement continues that story as monthly or quarterly snapshots of how your business is performing. Use it to monitor projected and actual income and expenses.
  • Plan for seasonal fluctuations. Every business has ups and downs. Ask some of your competitors when their usual slow times tend to occur so you can factor that into your planning.
  • Try to maintain a rapid cash conversion cycle. Avoid tying up too much cash in inventory or equipment, especially at the beginning. If you do have to buy equipment, try to buy used to save money.
  • Manage your paperwork like a pro. Your accountant and lenders will expect to see professional reports, spreadsheets, documentation, invoices, receipts and bank and credit card statement.
  • Ask advice if there are things you don’t understand. Financial management is a skill all business owners learn and master over time.