Importance Of Cash Flow Management

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Importance Of Cash Flow Management
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• Cash flow management is the most important aspect
  of every business. A healthy cash flow ensures
  that the business can pay salaries on time and
  have funds for the growth and expansion of the
  business. Resources are also available for paying
  vendor bills and taxes on time. Regular analysis
  of business finances ensures that one can project
  the future cash flow with accuracy and take
  necessary action.
• Following up on client payments and managing the
  accounts receivables effectively, ensures the
  timely flow of cash, as required by the business.
• Notable Facts Poor cash flow management may lead
  to business failure.

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• 4 Rules of Cash Flow
• 1. Growth sucks up cash 
• Growth costs cash. It's a matter of working
  capital. The faster you grow, the more financing
  you need.
• 2. Have a cash flow projection 
• What do you expect your cash balance to be 6
  months from now? This one question will transform
  the way you understand your business.
• 3. Understand receivables
• The money client and customers owe you is called
  "Accounts Receivables". And every dollar in
  accounts receivables is a dollar less cash
  available for the business.
• 4. Cash is King
• Cash keeps a business alive. No cash No
  business.
• Traditional Options For Increasing Cash Flow
• 1. Credit cards - High interest rates and fees
  for mismanagement make credit cards a dangerous
  option.
• 2. Bank Loans - Extremely low approval rates,
  along with hidden fees and personal gurantees,
  makes bank a time sucking, low-probability
  option.
• 3. Equity - Requires giving up of ownership, a
  percentage of profits and partial control of the
  company and the decision-making process.

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• When cash flow is freed up?
• 1. The constant worry about paying bills is
  eliminated. 
• 2. Relationships with vendors are improved.
• 3. And most importantly, business owners are now
  able to focus on running and growing a successful
  enterprise.
• Above All
• Cash flow management depends upon financing and
  not on measuring profits. The positive result of
  operating activities reflects the companys
  operational performance.
• Measure the essential cash flow rates that help
  in the effective decision-making
  process undertaken at the small and medium-sized
  enterprises. The company needs to have enough
  cash on hand to float its operations for the
  duration of the collection period. Because when
  the business goes out of cash, operations will
  simply cease.
• What Invoicera offers you?
• Using an online invoicing solution is the key to
  managing business finances more effectively.  The
  solution provides features like late fees and
  automatic payment reminders for getting timely
  payments from clients.  With Invoicera, one gets
  to receive online payments from multiple payment
  gateways helping clients to pay faster and reduce
  the quote-to-cash cycle.
• SOURCE The Importance Of Cash Flow Management
  Infographic

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• 2nd Floor, Plot no 55 P, Sector 44 Gurugram,
  India
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