Ephy
Active member
Importance of Cash Management in Business
It's important to remember that startup funding is a type of loan. Unless the money is expressly given as a gift, you're expected to pay it back to the lender, whether through direct payments or profit-sharing. Carefully managing your income and expenditures in the early stages of your business ensures you can afford to repay the loan.
After you pay off the startup funding in full, that same careful cash management keeps your business afloat. You may be able to obtain additional business loans down the road, but you'll often need to demonstrate that the funds will be used to develop a new product or project that will generate additional income. Lenders do not want to throw money at a sinking ship.
It's smart to hire a business accountant to organize and update all financial records and transactions. Collaborate with your accountant to generate expense reports and identify cost reduction opportunities. An accountant can also create financial reports that allow you to track your business's income so that you can strategize accordingly. For example, a dip in sales might require a fresh marketing push.
It's important to remember that startup funding is a type of loan. Unless the money is expressly given as a gift, you're expected to pay it back to the lender, whether through direct payments or profit-sharing. Carefully managing your income and expenditures in the early stages of your business ensures you can afford to repay the loan.
After you pay off the startup funding in full, that same careful cash management keeps your business afloat. You may be able to obtain additional business loans down the road, but you'll often need to demonstrate that the funds will be used to develop a new product or project that will generate additional income. Lenders do not want to throw money at a sinking ship.
It's smart to hire a business accountant to organize and update all financial records and transactions. Collaborate with your accountant to generate expense reports and identify cost reduction opportunities. An accountant can also create financial reports that allow you to track your business's income so that you can strategize accordingly. For example, a dip in sales might require a fresh marketing push.