You don't have to be a small business owner to understand the importance of cash flow. Anyone who's ever found themselves holding off on paying a bill until a check clears in their bank account is familiar with the basic premise of cash flow: You need to manage the money coming in to ensure you have enough on-hand to cover your spending as well as unexpected expense
Projecting Cash Flow
Cash flow problems often catch small business owners by surprise. An accurate cash flow projection can protect entrepreneurs against this situation. A cash flow projection charts the amounts of money your business expects to receive and pay out each month in a rolling six- or 12-month period. This forecast takes into account the lag time between billing your clients and getting paid; incurring an expense and paying for it; and collecting taxes that aren't due to the government until a later date. A well-prepared cash flow projection will allow you to plot anticipated cash flow positions over time.
Cash Flow Triage
It's Monday morning and you don't have enough cash on hand to make Friday's payroll. What options do you have? Cash flow crunches affect every company. Ideally, you can weather these crises by accessing a line of credit or revolving loan you've already set up with your bank, or tapping into cash reserves you've put aside for such an occasion. But what can you do if you've failed to plan ahead? Here are some triage techniques to help get you through such an emergency:
10 Ways to Help Increase Your Cash Flow
As any small business owner knows, maintaining smooth cash flow requires juggling nearly every facet of a business, from staying on top of accounts receivable, to extending lines of credit, to managing inventory. The essence of successful cash flow management is regulating the money flowing in and out of your business. Increasing your cash flow reduces the amount of fixed capital that you need to support the given level of your business. An increased, consistent cash flow also creates a predictable business pattern, making it easier to plan and budget for future growth. Here are 10 things you can do to increase your cash flow: