Cashflow simply represents the amount of cash that goes in and out of a business in a particular period; it is the lifeblood of any small (and large) business and enables it to continue operating by paying for its costs and, ultimately, to generate a profit. If a business does not have sufficient cash to meet its commitments it ceases to operate. Following are some methods for managing cashflow in business:
• Stay on top of the accounts to understand all the financial transactions that impact the business.
• Generate cashflow statements regularly to see the current cash position of the business and to analyze how money is moving through it.
• Cut spending wherever necessary to improve cashflow; cut expenses or pay them in a more timely manner.
• Ask your clients to speed up their payments and payment processors to process payments more quickly.