Cashflow provides the oxygen to allow your business to maintain its financial health and facilitate growth. Without this oxygen, your business will not survive.
In addition, good cashflow in your business will significantly reduce stress and help you sleep easier at night.
It is important to understand how cashflow impacts on your business. Once you understand it, you can take steps to improve it, as virtually all facets of your business have an impact on cashflow.
The usual approach is to have a cashflow forecasting for the business. However the real success of a cashflow forecast is in daily, weekly and monthly monitoring of the actual cashflow so that you determine how much oxygen is getting to your business. If the oxygen is running low, you are in a position to do something about it in a timely manner.
That may entail:
- Improving debtor collection
- Improving stock turnover
- Having funding facilities available as required
- Monitoring owner drawings.
Read our white paper for more detail on cashflow management..