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
