I heard a bad joke once about ”three-nail bookkeeping”:  one nail for the unpaid bills, one nail for the collected invoices, and the third nail to hang oneself.  Well, doesn’t that just make you want to quit your day job and work for yourself.  Depressing.

But as I look at why small businesses fail, a major reason that keeps coming up is poor cash management, thus the three-nail joke.  People owe us money, we owe people money, and in the meantime we are working oh so very hard at our “dream job”, that we don’t know how to keep from hanging ourselves on that third nail.  Not much of a dream, now, is it?

Many small businesses are started by people with a passion for something – mowing yards, making violins, building houses, delivering pizza, teaching school kids.  Or sometimes they see that their boss is successful and know they are just as good as their boss at the trade and venture out on their own – all without much knowledge and interest in accounting.  Cash flow management isn’t part of their vocabulary (if they have even heard of it).

The math of managing cash is not rocket science – but you have to DO IT.  Keep it simple. Keep it clean.  In his popular book Financial Peace, Dave Ramsey says that you must gain control over your money or the lack of it will forever control you.  Well said.

The Same Coin does not believe in three-nail bookkeeping. (Did I forget to say “ouch!?)  We believe in a strong cash budget where YOU take action to control your cash. Let’s do it!

Flickr image by Dendroica cerulea. CC BY 2.0 license.