Why you should be monitoring your Cash Flow regularly

The most common reason for business failure is poor cash flow management. As a business owner you should be constantly managing your cash flow ensuring there is sufficient working capital dependent on your type of business. Sufficient funds to pay creditors, suppliers, wages and a healthy cash reserve incase of uncertainty. Many businesses carry an overdraft or use credit to help with this.

  • Monitoring your cash flows will tell you where your money is going i.e. operating activities, investing activities & financing activities
  • Planning will allow you to pay suppliers on time and keep healthy business relationships
  • Should you have a deficit of cash due to poor planning, staff will be unhappy when they are paid late and this will have flow-on effects to your business.
  • Having sufficient cash flow will strengthen growth opportunities as you are able to service more debt as well as use excess cash on expansion activities

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