Manage Cash As a Solopreneur With Just 5 Tools

Solopreneurs only need five tools to be their own Chief Financial Officer.

Forget LLCs, CRMs, and CPAs, with these simple tools, the modern solopreneur can focus on what matters most: generating more cash.

Here are 5 tools I recommend to manage cash as a solopreneur:

Business Bank Account

Keeping your personal finances separate from your business finances is always a good idea. Not only from a bookkeeping perspective, but also it helps you mentally. 

Banks will let you open up a business bank account under your Social Security Number if file as a Sole Proprietor. Contrary to popular belief, you do not need a LLC to open up a business bank account.

Business Credit Card

Once your business bank account is opened, apply for a business credit card at the same bank.

Begin putting all your recurring expenses and as many business purchases on this credit card. Don’t worry about the interest rate, you’ll be paying it off every month anyways. 

The goal here is to begin building up a credit line with the bank so you can make larger purchases later once your cash flow increases.

QuickBooks Online

Quickbooks has earned its place as the best bookkeeping software for small businesses for a good reason, it’s the best due to its user interface and connectivity to banks.

Once set up, all you need to do is categorize your bank transactions.

Bookkeeping will get more complex when you have multiple customers and thousands of dollars a month in sales, but for now, keep it simple.

There are many experts at Nashville’s Entrepreneur Center that can help set this up for you.

Cash Flow Forecast

Cash flow is the movement of cash in and out of your business. Without cash, your business will die.

Quickbooks will be able to generate a Profit & Loss statement, but that is not enough. You need to be planning future cash inflows based on future customer deposits, as well as future purchases like expenses, supplies, and equipment. 

Most solopreneurs forecast cash on a monthly basis, but sometimes weekly or even daily cash flow forecasts are necessary. 

On my website, you can find my beginner’s guide to cash flow templates with links to pre-built templates to get started. 

There are many templates out there aside from the ones on my site, so just pick one and start using it.

Cash Break Even Calculator

It’s likely that you will spend more cash than you earn for the first few weeks, months, or maybe even years of starting your business.. That is why it’s important to understand your cash breakeven.

Cash breakeven can be calculated as : 

The answer you get will tell you how much of your product or service you need to sell before you can begin generating more cash than you spend over a period of time. 

With these 5 tools you stay in control of your business while not wasting time on distractions that don’t contribute to the bottom line. 

Clarity Cash Flow

About the author

Clarity Cash Flow is an online resources with a mission to provide business operations with the best cash forecasting and treasury management information available on the internet.

Leave a Comment