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“Earn Extra Money From Home by Keeping a Healthy Cash Flow!â€

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Posted by steve on July 28, 2011 at 6:35 am

Cash flow is the lifeblood of any at home based business. Whether you approve or not, cash is how companies evaluates the competition. If you can’t keep adequate funds to draw on, you can’t pay your suppliers, your employees and/or out-sourcers, or interest payments toward any borrowed funds. Lacking adequate funds, you’re home based small business will go under soon enough.

Cash flow is the movement of money into your organization and back out again. Even though you sold an awful lot of product and possess a fistfulfiling cabinet full of billing invoices to show for it, you better not try to change those invoices into cash or take care of your sales tax bill or suppliers with them. You have to have the “bucks”. At this point, you should be able to see that whether you’re just trying earn extra money from home or have a full time at home based business, understanding cash flow is fundamental to your ability to thrive! 

Cash Flow Tools

Managing your cash flow can very difficult, and your business standards considering how you provide credit to your clients, the amount of clients you have, and how soon they pay, for example, could all add up to make it much too difficult to maintain without some help. At this point, smart work from home company propriators turn to specialized tools to assist them in getting a handle on the process, the risks and the opportunities. 

Profit and Loss

Cash flow is a whole different animal than profit and loss. The fact is, a top home based business could be highly successful while seeing cash flow problems  that force it to failure. Profit is an accounting term, which includes non-cash parts and estimates. Cash flow is a “just the facts” number that just takes into account payments and expenditures. If your cash inflow is better than break-even but you have to spend hard earned cash on new office space and expensive ”stuff” to fill it to professionally operate your growing organization, cash flow may not be a pretty sight for awhile.

Cash flow may be even more challenging to foretell than profit and loss, specially for some at home based business entrepreneurs that are dependant on a few large customers. You may be able to nail down the time you will close a sale and earn a profit. But you could have hardy any control over when your customers settle up with you and have the cash flow into your pocket. 

Payments and Receipts

Available cash is not the balance in your home based small business bank account. Your cash balance in your check book needs to cover checks you have issued that have not yet been paid by your bank. You may have clients payments at your business that have not yet been deposited in your bank. That’s money that needs to be accounted for too. 

Where does the cash originate? For many top home business propriators, the most important source of cash comes from sales to customers. This may not always be a direct path, though. Many operations extend credit to customers, so the transaction hangs around as an account receivable, before the customer sends payment for what was bought and the receivable turns into to available capital. Money could also come from loans or an investment made. 

Where does money go? Just about where you might anticipate: to pay suppliers, out-sourcers, taxes, investments in your work from home company, etc. It may also be utilized to repay debt or supply an investment return to those who my have invested in your firm.

Bottom line: Cash rules!

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Statistics say that most people miss at least one MAJOR opportunity every year. The fact is that if you took advantage of all the opportunities that you have missed, you’d be better off than you are now.

Laying the right foundation to launch an at home based business is one of those opportunities!

Our North Star At Home Based Business Success System will change your life TODAY! Click HereRIGHT NOW — to “ROCK” Your New Top Home Business!  We’ll show you how!

 

 

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