- Small business owners can sometimes struggle with maintaining budgets
- A cash-only model manages various company budgets through checking accounts
- The model can give a better grasp of the company’s finances, but also has some disadvantages as well
Summary by Dirk Langeveld
It’s easy to become disorganized when setting a budget, focusing on near-term objectives or shifting money between different departments as needed. Of course, lax oversight of a budget can also lead to challenges and problems.
Vlad Rusz, a certified public accountant with Centaur Digital Corp, recently wrote in Entrepreneur that small businesses can try a cash-only budget to gain more insight into their company’s finances.
- This model involves setting up a main account to fund individual checking accounts for different company budgets
- Benefits include better awareness of whether you’re exceeding a budget, a simpler approach than a spreadsheet, and an improved sense of when you need to adjust your business strategy
- Disadvantages include the need to regularly adjust accounts, a lack of detailed information, and the need to have several weeks of cash available to start the accounts
