Cash Flow Management

How to Improve Cash Flow Management in Your Company

Your company is growing and expanding, and products are flying off the shelves… so why do you have a hard time managing the cash flow each month? Cash flow is a big issue for many small business owners, resulting in a situation where there isn’t enough cash to keep the company in business. In fact, cash flow management is one of the biggest stumbling blocks encountered by business owners.

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Don’t let your company sink because you don’t have the cash readily available! Instead, it is better to plan for the future with proactive cash flow management. Here are a few things that you need to understand about managing the flow of cash within your business:

What is Cash Flow?

It has been said that cash flow is the lifeblood of business. But, many business owners don’t understand this term! “Cash flow” is the movement of cash in and out of the business. It is normal to have money that is collected and spent for expenses, and this movement needs to be tracked.

When a company has a positive cash flow, then it means that more money is coming in than is going out. If there is a negative cash flow, then it means that there isn’t enough cash coming in to cover the monthly expenses.

The Difference between Profit and Cash Flow

Most business owners know the top-line income and profit of the company. But, they don’t read between the lines to see how the money is moving in and out of the company. It is essential to look at the patterns that are occurring on a daily, weekly, and monthly basis. These patterns give the insight to ensure that there is enough money to buy inventory, pay employees, and cover the payment for the office space and utilities.

Profit is the overall amount of money that is earned throughout the year. Cash flow is whether the money is available at the right times when the bills are due. Timing is the essential aspect of cash flow that needs to be evaluated.

Fix Your Cash Flow Problems

Do you feel like you are dealing with cash flow problems that are making it difficult for you to manage your company? By fixing these issues, you can decrease your stress levels and set your company up for future success.

We invite you to talk with our team here at Easier Accounting. We have experience helping small businesses improve their cash management. We are here to offer the assistance that you need! Call us right away at: (888) 620-0770

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