Three Metrics To Managing Cashflow

<p>Covid's nudged many of us closer to the cliff’s edge. Tragically, The Canadian Federation of Independent Business (CFIB) suggests one in six, or about 181,000, Canadian Founders are now seriously contemplating shutting down—this comes on top of the 58,000 businesses that became inactive in 2020.</p><p>But listen up, it's not all doom and gloom. Yes, Founders are in a tight spot but even before the pandemic hit, 71% of us we’re closing our doors due to poor cash management, as researched by  Industry Canada: <a href="http://www.statcan.gc.ca/access_acces/archive.action?loc=/pub/61-525-x/61-525-x1997001-eng.pdf&amp;archive=1"><em>Failing Concerns: Business Bankruptcies in Canada</em></a><em>.<br></em><br></p><p>It's human nature to avoid the uncomfortable work. That is, until we're forced to confront it! So, here's your opportunity. Roll up your sleeves, get to work, and choose to look at Covid as your catalyst, not your kryptonite. </p><p>Let’s start by getting smart about our cashflow—how it's earned, received, spent and saved. In this episode of The Gab Lab, NTN Pro, Kirsha Campbell (aka The Cash Flow Maven) is sharing some quintessential cash flow management tips. She takes us through the bottom-line challenges of the roller-coaster cashflow ride and how we can counter the effects without taking on leverage.</p><p><br>Part 1 // CASHFLOW FUNDAMENTALS - LAYING THE GROUNDWORK</p><p>Let’s nail the basics. “Cash flow is the lifeblood of your business,” explains Kirsha. </p><p><br></p><p>Cash flows are different from your income statement and balance sheet. A cash flow statement will tell you from where you received the cash, when you received it and where and when you spent it. Perhaps, more importantly, cash flow reports provide you with an accurate account of what funds you truly have access to. Don't assume your bank account balance is telling the whole story. </p><p><strong><em>Here's a rule of thumb: Any accounting entry that does not show up in your cash or bank account, will NOT affect your cash f