Why Knowing Ways To Improve Your Cash Flow Position Is So Crucial

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Are you wondering if you have hidden money in your business?

Do you wonder if you have money hidden in your business? Are you looking for ways to improve your cash flow position? Many times you see reports about the financial gains of Fortune 500 companies and stories of their success. Yet, you don’t need to be a mega-corporation to collect more cash. Knowing a few details in your financials can be used to improve cash flow management for small businesses.

Forbes indicates in an article (“What Are Your Financial Statements Telling You?”)that many businesses are perplexed at their growth when in fact it’s all in how you read your financial statement.

Surprisingly, business owners often have the ability to collect a lot more cash each year, but many don’t realize it because they don’t look at their financial statements. If they did, they might see several weeks’ worth of sales sitting on the balance sheet in accounts receivable – the unintended result, perhaps, of a shift in the company’s credit policies over time or a recent slowdown in collectability.” (

“Another really important metric on financial statements can be found on the cash flow statement: The line showing cash flow from operations. Cash from operations identifies how much cash the business is generating from operations, and the figure can’t be negative for long or a company is in big trouble. Negative cash flow from operations is a symptom of problems in the business, so watch that number carefully.” (

To be more specific, look at this example of a business that found cash in what they thought was a profitable account.

According to an article by, a business owner by the name of Andrew Blitstein, inherited a cleaning service from his father who had recently passed. After some time running the business, he was begged by his mom to seek the advice of a local accounting expert regarding his financial outlook for the business. After several consultations and reviews, they determined that a couple of his big accounts were deemed to be unprofitable, actually incurring additional costs to service the account.

By the time we finished, we could see he was losing from $50,000 to $60,000 annually on the account. “Think of it this way,” I said. “If you stopped doing business with this customer today, you’d make an extra $50,000.” (

What was determined was instead of pricing his services to justify a fair wage at $20 per hour, he was actually incurring expenses of $31 per hour, based on additional expenses needed to do the job. This took some time to figure out, after analyzing all of his financial statements to determine his pricing structure and how his jobs were being billed.

 Take the necessary time to look through your statements and seek Tulsa accounting advice groups or individuals that offer assessment sessions or free advice. You stand to gain from taking the extra time or money to study your finances. Try running a financial statement analysis. Your business will benefit from it in the long run.

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