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INTRODUCTION

Cash Flow and its Importance

When Starting a Business and managing cash flow issues is very challenging. You have plenty of expenses, and money is constantly moving out. You may also have no sales or customers that do not pay on time. So you will need to find other sources of getting cash, such as a temporary line of credit, to get you going and be in a favorable cash flow situation.

Usually, the first six months of a business are a critical time for cash flow. If you don't have adequate cash to carry you through this time, your chances of obtaining results will not be good. In addition, suppliers often don't give credit to new businesses, and many of your customers may want to pay on credit; this leads to a "cash crunch," which you will have to deal with.

It has been estimated that a cash flow is needed for your startup, which includes your personal expenses that will need to come out from the business. Therefore, the less you need to take from your business for personal expenses, the more you can devote to your business during this critical time.

Lack of cash is one of the leading causes for small businesses to collapse, Called "running out of money," which does close down a business faster than expected.


Cash flow is the money movement that shows the in and out of your business monthly. Although it sometimes seems that cash flow only goes one way out of business, there should be a two-way flow.

  • Cash is that coming in from customers or clients who are procuring your products or services. If customers don't pay on time, your cash flow is shown in the accounts receivable collection.
  • Cash that is going out of your business is in the form of payments for expenses, like rent, mortgage, loan payments, Interest, taxes, and other accounts payable.

Seasonal Business: Cash flow is primary for seasonal businesses—those that have a considerable business variation at different times of the year, such as hospitality businesses and summer businesses. Dealing with cash flow in this type of business is

complex, but it can be done with diligence.

Cash Vs. Profit: A business can likely make a profit but have no cash. How can that occur? The easy answer is that profit is an accounting notion, while cash, as mentioned above, is the amount in the business checking account. Profit does not pay any bills. You can have assets, like accounts receivable, money owed to you by debitors, but you may not have cash if you cannot

collect what is owing.

Lack of cash is one of the leading causes for small businesses to collapse, Called "running out of money," which does close down a business faster than expected.


Cash flow is the money movement that shows the in and out of your business monthly. Although it sometimes seems that cash flow only goes one way out of business, there should be a two-way flow.

How you can manage your Cash Flow

Here are some ways to on improving your cash flow to prevent a cash flow crisis: You are having better control of inventory. However, having too much inventory ties up cash. Therefore, keep track of stock so you can estimate your needs better.

  • Collect receivables. Set up a collections schedule, using accounts receivable aging reports to monitor your debtors—regular follow-up on debitors.
  • End lossmaking Dealings. It would be best to decide when it is time to end a relationship with someone who never pays.

Using a Cash Flow Reporting

The best way to continually maintain the business cash flow is to run a cash flow report. This report will identify the cash you received, and the cash paid out from your business. This cash position is generally done at the end of every month.

These are some examples:


  • What will occur to the cash flow if a customer pays a bill?
  • What will occur to the cash flow if your business buys supplies or increases inventory?
  • What will occur to the cash flow if you pay your employee or an independent contractor their wages or salaries?


At times, you need to keep track of cash flow weekly, maybe even daily.

To give you some tips: -

1. At the end of each month-end, look at your total sales.

2. It is adding up purchases that have been made and what is still needed to be paid.

3. The variance is what you will need to bring in the additional income to stay even.

If this monthly cash deficiency carries on for several months, you'll get further and further behind.

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Bookkeeping

You can create any structure you want by using the same tools as in the regular workflow. Add buttons and forms or anything else you'd want.

Being experienced with an accounting background, we can offer a wide range of reliable and accurate bookkeeping services. A common question often asked is, "What exactly does a bookkeeper do? "The answer to this question is shown below for our services as specialist bookkeepers. We can,of course, modify our services to suit the needs of your business whether you need a few of these services or all.

·      Accounts Receivable*-Invoice preparation and follow-up with the client

·      Accounts Payable* - Suppliers' invoices are processed and paid when due.

·    Bank Reconciliations -Reconciling Bank and Credit Card accounts with daily bank feeds

·     GST Filing                        - Timely filing of Bi-Monthly or Six-Monthly returns

·     System Training               - Training is required whenever you choose new software. We provide free training.

·    Accounting Software conversions – With our expertise, we can switch your accounting information to XERO/MYOB

·        Payroll

·        Unlimited Email Support

*Note:- Accounts Receivable and Accounts Payable are closely monitored to ensure that your business has no issues with cashflow

Payroll Management

Business Pillars offers all-inclusive payroll services that help your business run efficiently. We are committed to being legally compliant. Our services are built to simplify payroll processes for small to medium-sized businesses throughout New Zealand.

PAYROLL processing made easy

We provide the most updated payroll solutions tailored-made that is affordable to your requirement. We are committed to taking care of all the work demanded, allowing you to focus your time and energy on more essential things you love to do.

Our payroll services are:

·        Employees pay, On-time payments including benefits, reimbursements, deductions, Weekly/Fortnightly/Monthly

·        Employee PAYE

·        Payday Filing   – Timely filing returns to IRD

·        Leave entitlements– Accruals for each type of leave

·        Leave Payment - As per Holiday Act 2003

·        KiwiSaver contributions

·        Maintaining payroll records – payments and documentation

GST Filing

Timely Processing

We ensure that we file all GST Tax returns two weeks before the due date. We keep our clients informed before we proceed. This ensures that the client is at ease.

·        GST Filing        - Timely filing of Bi-Monthly or Six-Monthly returns

Monthly / Quarterly Advisory

The clients are in a position to process their reports from the software chosen. Based on the service requested, additional reports are also given that are not available in their chosen software. These reports enable the client to make corrective business decisions. Business Pillars reaches out to clients who require more assistance.

Monthly Management Meetings

The primary purpose of a monthly management meeting is to get the business to grow. This is either done through a phone call, zoom, or meeting in person.

Cash flow Management

Managing cashflow is a significant responsibility faced by most small businesses. We reach out to businesses making it stress-free to ride on the highs and lows of the cash flow throughout the year.

We assist in producing a cashflow statement which is a financial statement that summarizes the amount of cash entering and leaving the business. The cashflow statement measures how well the business can manage its cash position, meaning how well the business can generate cash to pay its debt commitments and fund the day-to-day operating expenses.

Budget Forecasting

Small business budgeting and forecasting

We need to get some relevant numbers to know what the future will look like regarding a business. Budgeting and forecasting will help to support this vision. Business Pillars can work alongside you to understand these basics so you can build a financially sustainable business.

What is a budget?

The budget estimates how much money will come in and go out from your business over time (usually a year). Budgeting and forecasting normally benefit all businesses and first-time startups to see if they can afford to run the business and compensate for all their hard work with a good return for their initiative.

What are the main principles of having a budget

Budgets forecast the money-making possibility of a business. It will also highlight things like:

  • How much will it cost to startup?
  • How much money is needed to borrow?
  • When will be the breakeven point?
  • How much should the customers be charged?
  • How many staff are needed?

Monthly / Quarterly Advisory

The clients are in a position to process their reports from the software chosen. Based on the service requested, additional reports are also given that are not available in their chosen software. These reports enable the client to make corrective business decisions. Business Pillars reaches out to clients who require more assistance.

Job Management

Job Management is software that supports project managers and teams to complete client requests and projects efficiently. Most professionals depend upon this job tracking software which assists them in supervising multiple sections of a business. Business Pillars are here to assist in setting up this service to track income and expenses related to service jobs.

XERO and MYOB both have the capability for Job Tracking

These are the advantages:-

·        Create quotes immediately

·        Easily track jobs from quote to invoice

·        Schedule the jobs on the go

·        Get paid quicker