7 Tips for Managing Cash Flow, from Linkedin.
Cash flow is the lifeblood of an operating business. Unfortunately, many entrepreneurs never learn about cash flow – and the differences that exist between cash flow, booking revenues and paper profit. Cash flow is the fuel that allows your business to continue operating and, more importantly, achieve growth. By managing cash flow effectively, you can achieve significant gains over competitors.
Here are 7 tips for managing cash flow that you can institute right now.
1. Cash FLOW not Cash. You need to be clear that cash flow is not the same as your bank balance. Think about the components of cash flow and realize that your bank account is just one of those components. If you analyze a cash flow statement, it starts with the opening cash balance, accounts for the effects of operations (as well as capital expenditures and financings) and results in an ending cash balance. Your bank account balance is simply the beginning cash balance line for the forward looking period you want to review. A healthy bank balance can be quickly compromised by difficulties in operations.