Mike Bohinc has taught principles of small business accounting to a lot of contractors Keeping Score CPA photo

Mike Bohinc has taught principles of small business accounting to a lot of contractors.

Online Exclusive: Accounting Basics for Small Contractors — Improving Cash Flow

Collect payment on completion of the work. Accept credit and debit cards. Offer a discount for early payment. Require down payments on larger jobs. Negotiate payment terms with your suppliers. Establish a business line of credit with your bank.

Previously, we addressed a question posed by a number of contractors on message boards regarding the difference between profits and cash. Specifically, “my income statement shows $50,000 but I don’t have $50,000 in my bank account. Where did the money go?” I introduced you to the Statement of Cash Flows, the financial statement that answers this question. As promised, in this installment of the series we’ll look at some ways that cash flow can be improved.

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