BusinessGrowth

CASH FLOW GOALS TO

WWW.EUSS.EDU

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Cash flowIs the amount of money coming in and out of your business.Cash usually comes from selling your goods and/or services.The cash is used to maintain business activities, like paying formaterials to make your products, employee wages, rent andother operating expenses. It is the main indicator that your

business is doing well.

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HOW DO YOUGET MORECASH

COMING INTOYOUR

BUSINESS?

EASTWAY UNIVERSITY OF HUMANITIES WWW .EUSS .EDU /EIPA

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Save at least enough cash that would cover 90 days' worth ofyour business expenses to cover any unexpected events likenatural disasters, market fluctuations, poor economy, illness, andmore.

Tip No. 1 - Have cash reserves

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Debts are not good for your cash flow. If you have debt, make it apriority to pay it back as soon as you can. As much as possible,

avoid acquiring unnecessary debts. If unavoidable, make surethat paying that debt is your number one priority.

Tip No. 2 - Avoid debt

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Your net margin should be above 10 percent to have a healthycash flow. If it is below that margin, then you need to reassessthe status of your business and identify where you are fallingshort.

Tip No. 3 - Set a target margin

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Pay yourself a reasonable wage. You deserve it. And don'tunderpay yourself. This can affect your personal finances. Also, ifyou can't pay yourself enough, it only means that you are notconfident in the ability of your business to make a profit.

Tip No. 4 - Pay yourself

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If you have a good cash flow, you will be able to save enough forcapital investments and/or expansion, so always aim for this. Thisshows that your business is in a good financial position and thatyou are using your cash effectively.

Tip No. 5 - Go for capital investments

These cash flow goals can helpyou to plan for the growth ofyour business. Depending onyour business strategy, you mayidentify from these goals which

to prioritise.

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Need help to establish good cashflow management practices?

CONTACT OUR TEAM OFCHARTERED ACCOUNTANTS IN AUCKLAND ON

(09) 576 4166

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We also offer thefollowing services:

Annual Accounts, Tax Returns,

and GST

Online Accounting

Business Planning and

Development

Rental Properties, Trusts, and

more

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The End

KEEP YOUR BUSINESSGROWING !

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