The current economic environment has been challenging for all business, particularly small business. To that end, it’s important to know your Burn Rate and adjust spending accordingly.
You may have heard people talking about scenario planning given the current state of the business environment. Should you be scenario planning? Before deciding whether you should, or should not, allow me to explain what it is.
Dentists have limited control over when insurance companies issue payments, or the speed at which patients pay out-of-pocket amounts. Yet their loan payments for expensive equipment and salaries for their staff are constant. To that end, cash flow is a major priority. There are several things to consider when analyzing cash flow, they are:
Do you know where your business’ money is going? If not, it’s time to look further. A great way to find out is by using the cash flow statement, or statement of cash flows. Along with the balance sheet and income statement, the cash flow statement will identify where your revenue is coming from and where it’s going.