If you have a business of your own, or are in charge of managing a business for someone else, one of the most important yet overlooked aspects of effective business management is cash flow management.
Lets face it, its all about cashflow. Generating cash flow, managing cash flow expenditures, projecting cash flow, collecting cash inflows, and so on. Without effective cash flow management processes and procedures, there is no business.
While business finance will and should always be secondary to marketing and sales, which are the life blood of any business, basic cash flow management is extremely important to maximizing the efforts of marketing and sales.
Here are a summary of some of the key elements to effective cash flow management to take into consideration when reviewing your business processes and procedures.
1. develop a cash flow tracking system and report, even if its a simple spreadsheet.
2. appoint one cash flow manager/tracker to make sure there is accuracy and timeliness in the process.
3. create a tracking time interval that best fits the needs of the business. Weekly intervals are more accurate than monthly.
4. appoint dollar values and timing to all activities and include them in your holistic cash flow model
5. project out at least 3 months and preferably 6 months. Make sure to update the cash flow tracking model on a weekly basis if possible.
By implementing these key elements into your cash flow management process, you will increase effectiveness of your overall business financing efforts.