RECIPES FOR SMALL BIZ

The success of a small business greatly depends on efficient cash flow management.
When I talk about cash flow here, I am referring to the movement of cash from the collections to the payments and the maintenance of a "safe" cash balance for operation....

My friend is complaining that he can not organize his receipts and monitor his expenses especially those which were not paid thru check--little expenses that when summed up together will make a dent on the profit like, office supplies bought in cash...

Sources of cash flow:
The major source of cash comes from the customers or clients. Either they are paid in cash/checks/or by credit cards. Some sales are on account which are known as *accounts receivables so that cash will only flow to the business when they're collected...

Many people equate cash flow with profit. This is not so. Profit is the accounting term for the difference between the revenues and the expenses. Expenses are not necessarily cash and revenues may not have been received yet such as receivables.
In small businesses, cash basis of accounting is preferably used i.e. only actual receipts are reported are revenues and only payments made in cash are deducted as expenses....