Cash flow is at the heart of every business and it often determines a company’s success or failure. By using cash flow management tools, your business can understand and regulate the influx of funds as well as outflow of payments. And anything that helps you regulate the flow of cash into or out of the business is a cash flow management tool. The cash flow management tools that are most useful to you are dependent on what kind of business you have.
For a product-selling business, an inventory report is of vital importance. It can help you to identify trends, point out potential slow months, and figure out when would be a good time to put products on sale.
If you have large contracts, then look for a budgeting tool that can help you plan out cash usage now for a long-term project. This can help prevent cash running out in the final stages of work or having to go back to the client to renegotiate the budget or terms of payment.
A service company may want to look for a program that allows grouping expenses by account and dividing up expenses among different clients. This gives you a better idea of how much is going into each project and provides the tools necessary to determine if it is an efficient use of your resources.
In a tight economy, cash flow management is an essential practice that can be made easier with programs to organize and assess the movement of funds.