From a financial perspective, April is a big month. Not only does Tax Day fall right in the middle, but it's also Financial Literacy Month. What are you doing this April to ensure you're more financially literate at the beginning of May than you were at the end of March?
The cornerstone of successful cash flow management – and, arguably, successful entrepreneurship as a whole – is understanding what you're doing in the first place. If you found yourself poring over receipts, tax forms and other financial documentation in preparation for this year's filing deadline without really having a solid idea of what it all meant, it might be advisable to brush up on your financial literacy. After all, the future of your business could be at stake.
Learning the lingo
"In the world of business, it's the language of accounting that helps us to communicate and understand each other," points out Juergen Kneifel, a senior associate faculty member with the business program at Washington's Everett Community College, in a recent article for the Snohomish County Business Journal.
Will Chen, an Edmonds, Washington-based certified public accountant, underscored the importance of accumulating personal financial knowledge, rather than simply handing off accounting tasks to financial services experts.
"Business owners need to be aware of the reports that are being generated and also learn to appreciate how they tell the story of the business," Chen told the news source. He specifically highlighted cash flow analysis, noting that it's "critical since cash flows represent the lifeblood of a business."
Get personal
For instance, if you're applying for commercial loans at your local community bank, you need to be able to discuss the state of your small business and intelligently evaluate the options available to you. It's fine – and even preferable – to have an expert weigh in while you're preparing your reports to ensure everything's on the screws, but you should develop enough of an understanding to talk about your company's performance independently, without your financial adviser holding your hand.
Take your job seriously
At the end of the day, it's your job to oversee your company's inflows and outflows. Having a system of effective cash flow analysis in place can be the difference between your business sinking or swimming – especially when times are still tight for many entrepreneurs.