Regular bookkeeping 'can help maintain cashflow'

Date: 10th September 2008

One business expert has urged small companies and sole traders to use their bookkeeping software to keep on top of their cashflow during the economic slowdown.

Writing on the cnplus.co.uk website, Business Link's Dominic O'Sullivan stressed that a poor cashflow could put a company out of business.

He added that, in times of economic slowdown, it becomes even more important for bosses to do as much as they can to control and monitor their financial situation.

The expert advised that all small businesses "monitor cash in and out of [the] business on a daily or weekly basis".

"Don't delay until your VAT returns and annual accounts," Mr O'Sullivan added in the article. "Make good use of your bookkeeping or accounting software to generate reports that tell you how the business is performing now. You could start your own spreadsheet if that suits you best."

He also pointed out that it was vital firms remain "realistic about what [they] can and can't change" with their finances.

"Prepare an honest forecast of sales, profit and cashflow, and be brutal with yourself about what needs to change. Do this regularly, so you always know what's going on and can respond quickly to possible problems."