Courier Jobs What is Cashflow?
August 24th, 2010 Filed under: Accounting Tips — Accounting Author
Courier jobs and the correct management of your cashflow is a very, very important aspect for your courier driving business. Cashflow basically means you can pay all your bills when they are due! Incorrect cashflow systems can result in your business going “bust”. So what exactly can you include in your “ready cash”.. money held in current accounts, notes, any unused bank overdraft facility, any deposits you have that you can quickly, note the word quickly, turn into cash.
You must not include these as available cash – deposits that require a long period of notice to withdraw, any money owed to you by your customers, or any stock you may have, or other assets. Please pay particular attention to the list of what you must not include as doing so has been the downfall of many businesses.
It is also crucial that you get the difference between cash and profit. I am always amazed that so many people when they first start a courier jobs business have absolutely no idea that there is even a difference!!
Profit means the difference between what your courier business earns and its costs. This figure is usually reached over a year or more trading time. Also bear in mind that you might have forecasted a good profit for the year but still might be a bit short of cash.
So why is hard cash so important if my business is predicted to make a fortune!! Well it is really rather simple and as I said before so simple people just don’t seem to get it.. An example is you tender for a driving job, you do the work but you still have not been paid. So it does not matter one jot how profitable your forecast is or how many courier jobs you do – if there is no money at the end of it, well that is it! Do not count the cash on assumption, its only yours once its in YOUR bank account.
To run your business effectively you need to start building up what is known as cash balances – this means due to the correct movement of your cash you are always in “positive cashflow” and trust me this is easier said than done. In the next article I will run through cash inflows and cash outflows. This is a more professional term for “money in and money out”!
For all the information you need on how to start your own courier driving business check out Courier Jobs
