The objective of running the business is to gain profits with appropriate cash flow management.

Managing the cash flow is one of the crucial things in the business because cash plays a vital role for business in day-to-day activities.  For this reason, it is said that “cash is the king”.

Good cash flow management will ensure that you always have money available for paying your expenses when they are due. Even profitable businesses can fail, if cash flow is not managed properly. If you don’t have enough money available to pay your lenders or suppliers, suppliers could cut supplies.

There are many areas in your business that can impact your cash flow management. It is important to understand how customer payment terms, supplier payment terms, loan payments, future spending decisions, and other items can affect your cash flow. Some of the payments you could not avoid at all. For e.g. super & salaries you need to pay on time.

Below are the key things to manage your monthly cash flow.

• Total monthly cash inflow
• Total monthly cash outflow
• Net cash flow
• Opening balance
• Closing balance