subject: Cash plan of Martial Arts Business [print this page] Cash plan of Martial Arts Business Cash plan of Martial Arts Business
Whereas the operating budgets are a dollar allocation against each item of income and each item of expenditure, the cash plan looks at how you are going to get the money into the business, how long it will take to get it in, what you do with the money when it arrives, who and how the money is handled, exactly how purchases are made in the business and how you manage the items that the cash was used for to purchase.
All these things seem very basic at a first glance. For example, how are you going to get the money into the business. Well, its not just as simple as asking people for the money. There are different methods of collecting money, form cash over the counter to people making deposits directly into your account. If a carefully crafted system is not in place to collect the money from each customer and in a way that meets their needs also, your martial business will fail and close it's doors within weeks or months of opening.
Money can be collected by cheque, money order, direct debit, merchant banking, direct bank deposits or cash. The method used depends on the cost of each method which may be a monetary cost or a time and convenience cost.
Some businesses need to invoice customers in order for them to make payments, whereas others do not need to do this. A martial arts business should do everything possible to avoid issuing invoices on a regular basis to members. Direct debit is the best method as it guarantees that payments are made on time, every time. I say this with a qualifier - payments will be made on time as long as people have the money in their account at the time the debit was transacted. Direct debiting is considered the most successful.
Direct debiting, merchant banking or direct bank deposits also have the benefit of security. Whilst these methods cost more, the martial arts business does not need to be as concerned about applying rules for the handling of cash or the storage of it as there is no risk of money being stolen. In the case that cash money is received, clear rules must be in place about who handles the money, how it is stored and when the banking is done.
The purchasing is considered the outgoing side of the cash plan or cash system. Invoices need to be paid regularly and in a certain way. Systems need to be in place that make it clear when the business pays its invoices, who does this and how the payments are made.
