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Cash Flow Management

Posted on August 29th, 2018

Companies rely on their cash flow for daily operation; large corporations might have the resources to survive a short period of slow business, but most entities do not. Cash flow management is one of the most common areas of improvement an owner or manager can focus on. There are several steps you can take to make sure your company’s cash flow is being managed properly.

Realize that Making Money Doesn’t Mean Having Cash

A lot of smaller business owners tend to equate cash with profit, but these are not the same thing. Being aware of the difference is a crucial first step to getting your cash flow in order.

While profit may include fluid assets ready for immediate use, it also includes money that has to be set aside for larger expenses and bills as well as fixed assets. Your cash, on the other hand, refers to the portion of profits that can be spent easily for daily operation.

Basing your cash flow management strategies on more factors than profit alone will yield more effective results from your efforts.

Put Your Financial Forecast to Use

A financial forecast is a detailed analysis of the most likely financial scenarios your company will experience in the near future. As these forecasts describe the expected profits and obligations of your business, there is enough data for owners to make proactive changes in daily operations that allow for measurable improvement in cash flow. You can have a clear image of where you expect to be financially in the next six months, if not the year, and extrapolate what your cash flow situation is likely to be at that time.

Have a CFO Help You

Financial forecasting and cash flow management are difficult tasks to complete without expert assistance. If you are currently lacking the insight and acumen of a chief financial officer, consider hiring Vasquez & Company LLP to assist you in all things financial, including cash flow. Not only do we help you manage accounts and draft accurate financial forecasts, but we also help you find ways to streamline your collection process, minimize your expenses, and introduce effective internal controls for effective resource allocation.

As part of our multiple outsourced CFO service packages, Vasquez & Company LLP provides cash flow management for businesses in Los Angeles and the surrounding communities. For more information about our firm’s approach to cash flow support, call us and schedule a consultation today.


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