Cash Flow Management

Cash flow is the money coming in and going out of the business. Most importantly, it is the cash you have in hand, to pay bills and keep your business running.

It is the process of tracking how much money is coming in and going out of the business. This helps to analyse the optimum cash need of the business. It also helps to predict the future cash needs and to budget for the same.

Cash Budgeting is estimating your future cash needs based on your current cash inflow and outflow. It is an essential step to ensure that you always have sufficient cash to repay outstanding dues and avoid cash shortage.

– Overestimating future cash inflows
– Keeping insufficient cash reserves for unexpected or unplanned expenditure
– Not keeping buffer-time to realise debts
– Not considering the seasonal trends when budget cash inflows