Managing Your Cash Flow

Cash Flow is an essential factor in the ongoing health of a business. Knowing how to maintain cash flow is essential to sustaining a successful business. Today, managing Cash Flow is one of the most difficult challenges facing owners of small and medium sized businesses. While a business can survive for a short period with a drop in sales and/or profits, it cannot survive without cash.

The best way to ensure that Cash Flow remains positive, timely, and available is to have a Cash Flow Plan and Forecast. In order to stay in control, this plan needs to be measured and monitored on an ongoing basis so that you can manage the business proactively. The following drivers of cash flow should be managed on a regular basis:
· Receivables
· Suppliers
· Inventory
· Assets
· Costs
· Seasonality
· Sales Volume
· Taxes
If you are not monitoring your actual results regularly, you cannot capitalize on any opportunities that improved cash flow might offer. Keep in mind that what you can measure, you can manage and there is always room for improvement!