• Home
  • Services
    • Cash Flow Forecasting
    • PPP Loan Forgiveness Assistance
    • Accounting Services
    • Bookkeeping
    • Payroll
    • Advisory Services
    • Consulting for QuickBooks®
    • Training for QuickBooks
    • Cloud Accounting
    • Business Formation Services
    • Business Compliance and Filings
  • QuickBooks Products
    • QuickBooks Online
    • QuickBooks Online Advanced
    • QuickBooks Desktop
    • QuickBooks Enterprise Solutions
    • QuickBooks Point of Sale
    • QuickBooks Payments
  • Industries
    • Services
    • Construction
    • Medical and Health Care
    • Real Estate
    • Non Profit
    • Retail
    • Restaurant
    • Manufacturing
    • Wholesalers and Distributors
    • eCommerce
  • Resources
    • Resources
    • Mobile Accounting
  • Blog
  • About
    • About
    • Send Us Your Referrals
  • Contact
(770) 777-4115
info@evolbussolutions.com
September 12, 2019

Does Your Business Have a Safety Net?

Rosalind Fletcher Business Tips

Tweet
Share
Share
Pin

One of the most important parts of managing a business is making sure there is enough cash to keep the business going. As a business owner, you probably have a very good idea how much cash you have in the bank at any time. The smaller your business is, the more likely you are to keep a close eye on cash.

Checking your cash balance is a daily function you should be on top of. Yet there is another often-overlooked responsibility that many business owners don’t spend enough time on, and that is managing your future cash, especially in light of unplanned situations. Looking ahead helps reduce your business risk and allows you more time to correct any upcoming dip in your cash balance.

Having enough cash is akin to having a safety net for your business. It can sometimes even mean the difference between staying in business and going out of business. To plan how much you might need for your safety net, you can use a few different methodologies.

One way to plan your safety net is to prepare for the worst-case scenario. How long would your cash hold out if no revenue were to come in but all expenses kept going out? Some questions you might ask:

  • At what point will your cash run out? How many weeks or months of cash do you have?
  • Do you have a line of credit you can tap at a bank?
  • Do you have other loans or sources of cash that you can tap quickly in case of emergency?
  • What expenses could you shut down without hurting your business if you had to?

Another way to plan your safety net is to do what the average business does: acquire the amount of cash you need for two to three months’ worth of operations and keep it on hand. Alternately, you can make a plan to liquidate that much cash on a very fast basis and only put your plan in place if it’s needed.

An easy way to get these numbers is to look at your bank statements in conjunction with your average accounts receivable and accounts payable balances. If that’s all Greek to you, no worries. Feel free to contact us and we can help you figure out a safety net number that you’ll feel comfortable with and that will keep your business risk low.

Once you have a safety net in place, you’ll gain peace of mind for your business. It’s one step in an overall disaster preparedness plan that you can make for your business.

Tweet
Share
Share
Pin
Why Having a Budget Is Important Avoiding Accounts Payable Errors: What to Watch Out for

Related Posts

Blog, Business Tips, Profits

Mix Up Your Revenues for More Profits

Business Tips, cybersecurity

Fighting Cybersecurity Threats in Your Business

Accounting, Accounting Software, Blog, Business Tips

30 Reasons Why It’s Better to Have Professional Help with Your QuickBooks® Software

Archives

  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • May 2017

Categories

  • Accounting (24)
  • Accounting Software (3)
  • Blog (8)
  • Bookkeeping (1)
  • Bookkeeping Tips (5)
  • Business Development (13)
  • Business Growth (9)
  • Business Tips (67)
  • Cool Tech Tools (13)
  • Cost-Saving Tips (1)
  • Customer Service Tips (6)
  • cybersecurity (1)
  • Decision-Making Tips (2)
  • Expense Reduction Tips (4)
  • Finance Management (1)
  • Management Tips (9)
  • Marketing Tips (1)
  • Money Management (1)
  • News (5)
  • Payroll Tips (3)
  • Personal Development (5)
  • Profitability Tips (10)
  • Profits (1)
  • Tax (6)
  • Technology (1)
  • Time Management Tips (4)
  • Uncategorized (16)
  • Home
  • Services
  • Products
  • Industries
  • Resources
  • Blog
  • About
  • Contact

Contact Us

Tax Services, Accounting Services and Services for QuickBooks®

EVOL Business Solutions LLC.

Serving the metro Atlanta, GA area

(770) 777-4115

info@evolbussolutions.com

5174 McGinnis Ferry Rd #183
Alpharetta, GA 30005


Intuit, QuickBooks, and QuickBooks ProAdvisor are registered trademarks of Intuit Inc. Used with permission under the QuickBooks ProAdvisor Agreement.
Copyright EVOL Business Solutions LLC. 2020 | Site Design by Accelerator Websites