Managing Cashflow in your Accountancy Firm II

In my recent video, I stressed the significance of cash in business operations. It's the lifeblood that lets you buy groceries, cover your rent or mortgage, and establish your firm with your hard-earned $20,000 life savings (like we did).

Every month, I receive a set of financial reports, but the star of the show is the Statement of Cashflow. It's like the beating heart of your financial landscape. But why is it crucial? Because it's all about the green bills in your financial piggy bank at the end of a period.

Meanwhile, the P&L report, like that show-off cousin, boasts about how much money you made, even if you haven't collected it yet. It's like selling widgets with "pay later" terms - your P&L showcases the full revenue, but the cash flow statement reveals what you've actually collected.

But what if you're an accounting firm, not a widget seller? You might think it's not relevant, but it is. Just like widgets, accounting firms have their own version of unpaid work with invoices and collections. The cash flow statement is your guiding financial map, showing how much cash you have on hand at any moment, like an umbrella in the rain.

It's not just about the numbers; it's about the narrative behind them. Just like reading a captivating novel, the intrigue lies in the details.

The awesome thing is that as an accounting firm, analysing the Statement of Cashflow is an excellent place to start in providing advisory services to your existing clients and new clients. It's number-based advisory work so much more familiar for accountants and therefore can benefit your business and your clients business.

I'm Kane Munro, and I'm here to answer your questions and discuss my experiences in accounting. Feel free to reach out via DM, email (www.activeoutsourcing.com.au), or leave a comment wherever you're watching this. Your feedback matters! 💬📊 #Accounting #FinancialReports #CashFlowStatement