Cash in Bank doesn't mean a thing

Many people in business run their business on the basis of how much money is sitting in the bank account.

If there is a lot of cash in the bank, they feel that the business is doing well and if there is a small amount of cash in the bank, then the business is failing to operate to its potential.

The problem is, this is the basis that many business owners use to assess how their business is going.

Business owners need to realise that cash in the bank does not equal profit. You cannot manage your business properly on this basis. Your business will eventually fail if you do not know the difference between cash and profit. Never ignore the difference between the two.

There are 4 things that business owners need to learn:

  1. Bank balance 
    The amount of money you have in the bank is not an indication of how well your business is going.

  2. Bills in drawer 
    Even though your bank balance may appear healthy, there may be a lot of bills sitting in the desk drawer that have not yet been paid. Once those bills are paid, your cash balance will reduce and the ...

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