Strong finances start with a strong foundation.
In this episode of Small Business Smarts, we break down the essential steps every new business owner should take to understand cash flow, organize expenses, and build a budget that supports long-term growth. Learn how simple systems, smart planning, and the right tools can turn financial uncertainty into a roadmap for success.
For more information, visit ADP.com/SPARK
Video Transcript
Victoria Jordan, Found of Pureworks Studio
Cash flow is always a concern for small businesses, and I want to make sure that mine thrives. So I'm going to reach out to someone who can give me some guidance. Heather Sperduto with the ADP.
Hi, Heather.
Heather Sperduto, ADP vice president, sales operations - accounting channel
Hi, Vicki. How's it going?
Victoria
It's going great. So great, in fact, that I have to start thinking about growing and, setting myself up for success as far as, like, how to support cash flow and my finances.
Heather
Vicki, it sounds like you're in that takeoff phase of owning a business, which is exciting. I always encourage small business owners to proactively check in with their accountant and review what's really going on. Whether your bookkeeping these are changing or you're adjusting how you pay consultants or employees and handle benefits, your accountant can help you ensure that you're managing cash flow every single step of the way.
Victoria
Okay, so tell me a few things about how to look at my budget.
Heather
Well, for starters, Vicki, business owners should separate their personal and business finances. This keeps record keeping clean and easy for your accountants to manage. Secondly, getting into a regular routine is key, especially around payroll. That means staying on top of each payroll run, not just the net pay, but also the taxes that have to be deposited and paid.
Once you build that habit, every pay cycle becomes much easier to step back and assess how money is flowing in and out of your business, and that will help you make more informed decisions.
Victoria
Can you tell me a little bit about like what are fixed expenses versus variable? What do those terms mean?
Heather
Typically fixed expenses are the cost that stays same each month, no matter how much you sell and the revenue you bring in. Think of it in terms of rent or insurance or salary wages for full time staff. Now variable expenses. They rise and fall with your business activity like credit card processing fees. Or maybe for restaurants, think of the cost of ingredients. Also maybe shipping. Or how about the hourly labor that increases when you get busy?
Victoria
Thank you so much, Heather.
Heather
Looking forward to hear more of your success in the near future. Vicki.
Victoria
I'm going to start to put all this together and make an appointment with my CPA. For additional information on healthy cash flow and managing finances, go to ADP.com/Accounting.
