Cash Is King. Everyone knows that. But with more ways of transferring money popping up startups and freelancers alike need to be on top of their cash management more so than ever. Here are 3 keys to cash (also pronounced “cayyyshhh.”)
Sweep your cash. Don’t let money sit in 3rd party accounts like PayPal, Square, etc. Transfer that money to your bank as often as possible. It could take several days and you may have bills coming up.
Segregate your cash. Set up different accounts for different functions. Have an “operating” account for day-to-day expenses, a “payroll” account for upcoming wages to be paid to employees/freelancers, “savings” acct for future projects, and so on. Work with your bank to save on fees, especially on transfers between your accounts.
Reconcile! The infamous accounting word. Do it. Every month. AT LEAST. Don’t just match your books the your bank statement - that’s not true reconciliation. Identify differences and carry those differences until your books and bank statement sync up. For ex: an outstanding check to a vendor hasn’t been cashed yet. The money is still in your bank but your books show you paid the vendor - that’s ok. Once it’s cashed the difference goes away and the planets are aligned once again.