CASH FLOW MANAGEMENT FOR BUSINESSES

There is an old saying, "Cash is king." Another is, "Happiness is a positive cash flow." I am sure you must have heard it often, isn’t it? According to one of the surveys conducted, up to 60% of failed businesses, say that all or most of their failure was due to cash flow problems. ‘Businesses have to have as their guide,’ another old saying. Nothing matters more than cash. Making a profit is the main aim of all businesses; no doubt, But Cash management is the key to business success. So today we will look into the most important aspect of business success – Cash Management
CASH is the single most important ingredient of survival for a small business. Medium to big businesses can find ways to survive if at all they find themselves stuck in an undesirable cash trap situation.
Here are the tips for effective cash management, specially for SMEs and start ups

Cash Projection: To start with, develop a cash projection sheet / plan. In today’s tech-savvy world, all information is available to you at any given point of time through your Smartphone / tablet etc. But the best practice is to write it down and keep it handy with you.

Cash prediction: Secondly, you need to chalk out both short-term (weekly, monthly) cash flow projections to help them manage daily cash, and long-term (annual, 3-5 year) cash flow projections to help them develop the necessary capital strategy to meet their business needs

Healthy relations: As you know that you should always maintain good relationships with bankers and other creditors it goes a long way in setting effective goals for your business and toward your business success

We need to remember  cash flow is the blood that keeps the heart of the kingdom pumping. Cash flow is one of the most critical components of success for a small or mid-sized business. Without cash, profits are meaningless. Because trying to run a business without managing cash flow is like trying to paddle a boat without an oar.

Just to sum up has is the three golden rules of cash management:
1. Knowing when, where, and how your cash needs will occur
2. Knowing the best sources for meeting additional cash needs
3. Being prepared to meet these needs when they occur, by keeping good relationships with bankers and other creditors