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Improve Your Cash flow: Managing cash flow

by Robert McCallion and Alan Warner

Managing cash flow is the responsibility of everyone involved in running a business. Cash flow is the difference between the money in the bank account at the end of an accounting period compared to the beginning, and there are a few key drivers of this number.
The first and most important driver of cash flow is the making of profit from your day-to-day operations – selling your products for more than it costs to make them. There are then two other key areas of management that drive cash flow – keeping stock levels at the optimum level and collecting cash from customers as quickly as possible after invoicing. Many businesses have gone bust because they made profit but forgot to pay attention to these two key areas of management.
There are two more areas of cash flow management but these are double-edged. One is to keep capital investment as low as possible while still achieving your strategic goals – to spend no more than is absolutely necessary to deliver your long-term strategy.
The other driver of cash flow is how quickly you pay your suppliers; you should delay payment as long as possible while still maintaining good service and good relationships.
It sounds easy but it isn’t easy at all. That’s why so many companies go bust!


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Improve Your Cash Flow: Teach Yourself

Improve Your Cash Flow: Teach Yourself
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Get to Grips With Book Keeping: Cash flow Cash flow is often described as the blood of business, due to its importance in ensuring commercial survival.
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