Financial literacy is important for everyone but it’s essential if you’re in business.

Most businesses fail due to lack of cash, not profits

One definition of financial literacy is “The ability to make informed judgements and decisions regarding the use and management of money”.

For business, it is understanding where your money is coming from and where it is going. It’s also knowing how to use this information to make informed decisions, resulting in better outcomes. 

So, it’s crucial you understand your cash flow and keep an eye on it every day.

Our purpose at Xero is to help make life better for people in business. So I want to highlight three tips for new business owners.

Bank reconciliation

A bank reconciliation ensures all your bank transactions are recorded and categorised in your business’ accounting system. 

If performed daily, or at least weekly, you’ll have an accurate and

I’ve been an accountant most of my adult life and have seen so many business owners, who love what they do, but battle with their financials to stay afloat. In fact, Xero’s Small Business Insights (XSBI) show that on average, Kiwi small businesses are cash flow negative 50% of the time. Additionally, the recently released Xero Small Business Insights special report: Pandemic Insights: Small Business Experience shows that on average small business revenue was down 40% in April. It’s since increased but there is no denying this year has been particularly tough for businesses. 

A support network starting with an advisor or business coach can make a huge difference. And this is why I’m so passionate about connecting advisors with small businesses all around the country. 

Last week during Xero Hour #XeroOnAir, I had the privilege of chatting with Nathan Maisey and Peter Harris. Both Nathan and Peter are