Cash Flow Management

Cash flow is the movement of funds in and out of your business. This information should be tracked as frequently as daily to determine where your funds are at all times as a basis for sound business decisions. Our services include planning for positive cash flows, and the subsequent maintenance of your accounts.

Positive cash flow – This means the cash coming into your business from sales, accounts receivables, etc. exceeds the amount leaving through expenses and accounts payable.

Negative cash flow – This means the cash going out of your business is greater than the incoming cash.

Cash Flow Projections – Knowing when you’ll receive and need to spend money is part of the budget process. Reviewing the prior year’s cash flows and adjusting for any anticipated changes is a good start for the year. As the year progresses, the projections may change frequently to accommodate the business activities.

Addressing cash shortages – Some of the ways to handle a cash flow shortage:

• Apply for a loan from a financial institution
• Apply for a line of credit from a financial institution
• Speed up the collection process
• Finance equipment through leasing or loans
• Liquidate assets
• Arrange payment options with vendors.

Addressing cash surpluses – Some of the ways to handle a cash flow surplus:

• Pay off loans or debts
• Make short-term investments

The best way to track your cash flows is by monitoring your checking accounts daily, and using monthly cash flow statements.