Tip of the day #15 - Are you making a profit and still lacking cashflow?

You know you're making a profit, yet there never seems to be enough cash flow.

One reason is using business cash for personal reasons. These entries are applied to your shareholder loan account and are not part of the Profit or Loss calculations.

"Oh you forgot that you purchased a Lexus and took the money out of the company."

Another reason could be fraudulent activities. You should review your bank transactions and the bank reconciliation report very carefully at least once per month. Do not pre sign cheques or give your bookkeeper access to your bank account.

You should also review your in house financial statements for anomaly's. Do some expenses look too high, if so have your bookkeeper present all the bills to back up those entries.

Barbara Steckly from Preferred Client Services, partnering with you, your Edmonton business, your team, and your accountant to make a positive difference in our bottom line.