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Do You Treat The Dishes

Do You Treat The Dishes Better Than Your Cash Flow?


by Philip Campbell, CPA

Copyright 2003, Philip Campbell - All Rights Reserved



Cash is the lifeblood of every business.  Cash is what keeps your business alive.  It is a very precious asset that must be treated with the care and attention it deserves.



Always remember, Cash Is King, because No Cash = No Business.

One of the cold, hard realities of business is that if you ever run out of cash, your business goes down the toilet.  All your hard work goes right down the drain.  Your dreams and desires for creating an exciting and profitable business come crashing down.

Stop and ask yourself this question – What is my cash balance right now?

If your answer is “I don’t know”, then you don’t have your cash flow under control.  It means you are not “doing today’s work today.”  You are not “doing the dishes” each day.

An Accurate Cash Balance is Critical

In business, you have to have good numbers.  And the most important number of all is the cash balance. 

Even the most intelligent and experienced person will fail if they are making business decisions using an inaccurate or incomplete cash balance.

Decisions that might otherwise be brilliant become deadly when they are made based on inaccurate data.  If you go to the doctor and he makes an inaccurate diagnosis, the treatment he prescribes for you could be harmful – even fatal.

 Doing the Dishes Every Day

The key to keeping an accurate cash balance in your accounting system is to do today’s work today.  It’s “doing the dishes” every day.

The problems start when you, or the person you have in charge of your books, violate this rule.  When entering cash receipts is put off and entering invoices is delayed.

 The “Dishes” Test

If you’ve gotten in the habit of putting off the “non essential” accounting and “data entry” work, I’d like to suggest a little test.

Try this test for one full week and see what happens.  Here’s the test:

Stop doing the dishes.

Allow them to stack up for a full week.

Save yourself the time and trouble of cleaning up after meals.  After you enjoy a good meal, put the dishes in the sink or on the counter and get on to the other things you have to do.  Move on to the other important things around the house.

Just think how much free time you will create for yourself.

Life is good, right?

Well, maybe not.  After the first day or so, a couple thoughts start to run through your head.  “I’m still going to have to do the dishes.  When I do, there is going to be a huge stack and it’s going to take a long time.  After a week, they are also going to be smelly and have old and hardened food all over them.”

You would be embarrassed when friends come over and see a dirty pile of dishes stacked up in your kitchen.  Then after a week, isn't it a much, much harder chore? 

Stop and ask yourself this question - do most people do the dishes every day because they just love doing the dishes?

Of course not.  They do them each day because it’s one of those chores that is best done in bite-sized chunks. 

Take Control of Your Cash Flow

Doing the dishes every day is the practice of doing today’s work today.  You do it because the alternative approach is a really bad idea.

You need to put this same approach to work in your business.

Specifically, make sure your financial records are kept current each day.  This will ensure you have an accurate cash balance.

Make the commitment NOW to take control of your cash balance.  You owe it to yourself and to your business.

Remember, Cash Is King, because No Cash = No Business.

 

About Philip Campbell
Philip Campbell is a CPA and the author of the book: “Never Run Out of Cash, The 10 Cash Flow Rules You Can't Afford to Ignore”.  Philip has helped hundreds of small business owners take control of their cash flow.  He shows you how to eliminate your cash flow worries and take control of your business.  Is your cash flow under control?  You can download his new Special Report "The Secret to Creating Cash Flow Projections You Can Trust" FREE Right Now. Click Here to get your copy NOW.