Small company Cash Flow Management

There are a variety of tasks that are essential to end up being included in any small business cash flow management system. Some tasks are every day, some are weekly and others take a monthly basis. Defining who will be responsible for the tasks and routinely checking out that they are done is good management. Become proactive in knowing what cash you will require in the future.

To manage the cashflow of the business, within the day to day operation, it is important to include the following tasks:

1 . Get ready and review your Cash Flow Plan every week. How much cash are you starting with, what money is due in and what cash is due out.

2 . Reconcile your cash taken daily including payments received from credit cards. Monitor your internal controls for handling cash. Have different people reconcile your bank accounts and money accounts to those who deposit the particular checks and cash.

3. Review your Profit and Loss at least monthly. Preferably prepare your P&L in house or even get your accountant to do it for you, yet do not wait too long. Accounting software programs such as Quickbooks and MYOB are usually suitable for a range of small businesses and are simple to set up to generate P&L reports.

4. Review your Balance Sheet monthly. Estimate your quick ratio (liquid resources divided by current liabilities) -should be greater than 1 and your present ratio (assets divided by liabilities) – at least 2 to 1 is good.

5. Ensure any excess money is earning you interest and it is easy to access.

6. See your bank for any line of credit before you need it

A Small Business proprietor may wear many hats across his/her business, however Cash Flow Management is one area that the Business Owner is wise not to delegate or ignore
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