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Colour Accounting refresher – Cashflow is critical


Insights from Justin Martin, Colour Accounting Facilitator:

Covid-19 has presented business owners with many challenges, not the least managing cashflow. Cashflow is critical for every business, and understanding the levers that impact cashflow has never been more important.

In our recent 50-minute Colour Accounting webinar we looked at some of the key cashflow levers using the BasIS framework (Balance Sheet and Income Statement).

Broadly, cashflow levers can be divided into two categories: uses of funds (such as selling assets or minimising expenditure) and sources of funds (such as borrowing from a lender/owner or increasing revenue).

In the webinar we showed how each lever works to increase cashflow, and the impact of this on other parts of your financial statements. For example borrowing from a lender increases your cash balance while also increasing your obligation (liability) to a third party.

As an owner or manager there are lots of cashflow decisions to be made as we navigate this uncertain time. Having a good understanding of the impact of each decision by building your business acumen is an essential skill right now.

Check out upcoming Colour Accounting workshop dates here.