It must be emphasised that your profits are not the same as your cash flow. It is possible to project a healthy profit for the year and yet face a significant and costly monetary squeeze at
Created by Dr. DANIEL MUGUKO Last Updated 15/04/2021 23:23
Cash flow is generally acknowledged as the single most pressing concern of the SME (small and medium-sized enterprise). In its simplest form cash flow is the movement of money in and out of your business. Cash flow is the life-blood of all growing businesses and is the primary indicator of business health. The effect of cash flow is real, immediate and, if mismanaged, totally unforgiving. Cash needs to be monitored, protected, controlled and put to work.
Cash-flow management is vital to the health of your business and it is in the day-to-day management of your business that cash is most effectively controlled. Those day-to-day decisions rest firmly with company directors and business owners. This guide is designed to be used on an ongoing basis as a support tool for long-term planning and day-to-day reference. It explores cash management and looks at maximising cash inflows, managing cash outflows, cash-flow budgeting and using company accounts. It is not intended to be complex or exhaustive, but rather to act as a basic guide to the smaller business.