Managing a business's finances

Cash Cash flow is not profit Accrual profit and cash movement are two different measurements. This guide explains the working capital cycle, why growth consumes cash, how to calculate the cash conversion cycle from your own accounts, and the early warning signs that appear before the bank balance does. 16 min read Working capital Working capital and the cost of growth Receivables, inventory and payables are the three levers that decide how much cash your business ties up. This guide works through what happens to cash when revenue doubles, what overtrading looks like, how credit control limits growth, and when to fix the cycle rather than finance it. 16 min read Unit economics Unit economics and break-even Contribution margin, fixed and variable cost, break-even in units and in revenue, margin of safety and operating leverage, worked through with illustrative numbers, and why a business can grow revenue while destroying value. 15 min read Professional practice Financial ratio analysis Liquidity, efficiency, profitability, solvency and cash ratios worked on one set of statements, with DuPont analysis, interpretation and the traps to avoid. 9 min read Professional practice Budgeting and variance analysis Budget types, flexible budgets and a fully reconciled variance analysis: price, volume, mix, material, labour and overhead variances, and rolling forecasts. 9 min read Controls Financial controls a small business actually needs Practical financial controls for a business with a handful of staff: segregation of duties when you only have four people, approval limits, bank reconciliation discipline, stock counts, which controls catch fraud and which only create paperwork, and what an owner should personally review every month. 16 min read