Cash Management is vital for company growth.
5 Simple Rules for Managing Cash Flow:
1. Keep your books accurate and up to date.
Your books should be properly closed each month to avoid surprises at year-end. When you do this, you will have the numbers you need – when you need them.
2. Collect sales as early as possible.
First and foremost, take care of your customers. Have firm collection policies so you’ll get your money from sales faster and easier. Review your pricing policies; you may be undercharging and missing an opportunity to boost your cash flow, and consequently, your profits.
3. Review your budget on a regular basis.
This will help you decide in advance how your money will work for you and enables you to alot for unexpected costs. Suggest, on a monthly basis, items that can be trimmed. When you budget and take a “big picture” view, you will see potential money problems in advance, and be able to make adjustments before the problem appears.
4. Do NOT manage from the online banking.
The bank balance and the cash balance are two different forms of cash. Rarely will the two ever be the same. Reconcile your bank/credit accounts on a regular basis.
5. Have Cash Flow Projections
Can you project how much cash you will have 90 to 180 days from now? Have at least a 90 day cash projection on hand and update it accordingly.
We can help with the following:
- Forcast and evaluate current financial condition by developing a cash flow projection – from quarterly projections to multiple years.
- Estimate financing requirements.
- Track previous cash flow sources/issues.