cash flow model

cash flow model

Al busineses want to improve cash flow and in doing so budgeting is key. You ned to plan ahead and understand the movement of cash within your busines. If cash flow is not managed, busineses can easily over extend themselves. So what is your cash flow? Put simply, it is the end balance after money has flowed into your busines from sales, equity injections, bank finance etc and out of your busines for expenditure including salaries, capex, supliers, VAT and tax . Cash flow generation may be partly limited by the characteristics of your industry but efective monitoring and management of cash flow peaks and troughs wil make a big diference. Efective cash flow forecasting and monitoring is esential . Monthly monitoring of your actual performance against budget wil help you identify problems and take action . When negotiating contracts with customers, make cash flow one of your primary objectives. The external financing options Bank debt – an overdraft, loan and working capital facility are the traditional products on ofer. Aset finance hire purchase or lease – an option for big ticket items such as plant and equipment which wil help spread the cost. Showing external providers of finance that you have tols in place to monitor and manage cash flow wil increase your credibility with them and your chances of geting finance. Always lok at the biger picture when managing your busines, use cash flow forecasts as an esential management tol and remember cash wil always be king . This is where you are seling so much that you run out of cash to buy the resources to deliver it.
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posted by car-toyota @ 12:58 AM