What it is
Cash flow is the total amount of incoming and outgoing cash being transferred in and out of a business, which is used to evaluate the liquidity and working capital of an organization.
Cash flow management is the process of monitoring and analyzing the cash flow resources and uses. It is meant to optimize the net amount of cash to ensure that the company is positioned to remain solvent.
How it affects your business
As a business owner, you would surely agree with Fred Adler’s saying, “Happiness is a positive cash flow”.
Cash flow is the blood that keeps the heart of the business pumping. Therefore, cash flow management is what causes a business to fail or succeed. When your cash-in exceeds your cash-out, you are in a “positive cash flow” situation, meaning that you have enough to pay your bills. However, when your cash-out exceeds your cash-in, your business is in danger of being overdrawn. Businesses could be profitable but in a negative cash flow position, hence, cash flow management is critical for any organization.
Achieving a positive cash flow needs work and effort. We at XB4 will help you analyze and control your cash flow effectively.
At XB4, we will help you avoid a cash and working capital crisis by developing a cash flow projection for your business. We will also help you develop both short-term (weekly, monthly) cash flow projections to help you manage daily cash, and long-term (annual, 3-5 years) cash flow projections to help you develop the necessary capital strategy to meet your business needs.
Creating an accurate cash flow projection is just one of the many cash management services we provide, as we also provide:
- An appropriate line of credit
- Cash collection acceleration techniques
- Proven effective collection policies
- Proven effective payment policies
- The maximum rate of return on your idle cash
The above services will allow you to:
- Know when, where, and how your cash needs will occur
- Know what the best sources are for meeting your additional cash needs
- Be prepared to meet these needs when they occur by keeping good relationships with bankers and other creditors