Cash flow management

Discussion in 'Growing and Managing a Business' started by justineholmes69, Sep 23, 2011.

  1. justineholmes69

    justineholmes69
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    Cash flow management is the process of monitoring, analyzing, and adjusting your business' cash flows.

    For small businesses, the most important aspect of cash flow management is avoiding extended cash shortages, caused by having too great a gap between cash inflows and outflows. You won't be able to stay in business if you can't pay your bills for any extended length of time!

    Therefore, you need to perform a cash flow analysis on a regular basis, and use cash flow forecasting so you can take the steps necessary to head off cash flow problems.
     
  2. Bharat Book

    Bharat Book
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    Great thread started here..I want to share view from my side as follow:
    cash flow management is important for survival and growth of business.For effective business we need to balance the timing and amount of cost with our income. This management helps to plan how much and when to borrow and how much available cash you're likely to have at a given time. income and expenditure cashflows rarely occur together - cash inflows often lag behind, so it is important to maintain enough cash in your business to deal with day-to-day running costs.our aim should be to speed up the inflows and slow down the outflows wherever possible.Two types included in cash flow management:
    *cash inflows include:
    1) payments from customer for goods/services
    2) shareholder investment
    3) interest on saving or investment
    *cash outflow include:
    1) purchase of stock,raw material
    2) daily operating expenses
    3) income tax,corporation tax
    *To improve everyday cashflow:
    1) ask customer to pay early
    2) increase sal and profitability
    3) ask from extended credit term from supplier
     

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