graphic of keeping track of buyers and inventory
A small business owner arrives at the office to find a pile of checks on his desk awaiting his signature. Included are large, critical payments to raw material suppliers, and payments to the utility companies for electricity, water and natural gas used in the manufacturing process. There’s also a check to an office furniture supplier and a local charity. The checks were prepared by the trusted Accounting Clerk, who has been with the company for over 20 years and is the sister of the owner’s next-door neighbor. The pile does not include any additional paperwork, just the checks. The owner,
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photo with measuring tape and text to measure is to know
Each business is unique. This is especially true with small businesses, many of which have developed their own special processes or methods of doing things. However, there are some things that all businesses have in common. They all have something to sell with the intent of making a reasonable profit. They all need to purchase materials or inventory and convert them into their finished product, ready to sell at a competitive price. They need customers to purchase their products. They need to make payments to their vendors, send invoices and collect from their customers (because, don’t forget, a sale isn’t
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cash in pile with money flowing up and over to cash out pile
How Big is Your Gap? Like many professionals, I try to leave my work at the office to make my personal time with the family as free of work-related concerns as possible. However, one particular “business” topic that occasionally comes up, especially during the holidays, is our family’s “cash gap.” Basically, the cash gap is the number of days between when we spend money buying presents, and when I get paid next. You can see why this is important to me! And, just like in my home, an understanding of the cash gap is absolutely critical for your business as
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