Good cash management is simple. It involves:1.Knowing when, where, and how your cash needs will occur
2.Knowing the best sources for meeting additional cash needs
3.Being prepared to meet these needs when they occur, by keeping good relationships with bankers and other creditors.
The
starting point for good cash flow management is developing a cash flow
projection. Smart business owners know how to develop both short-term
(weekly, monthly) cash flow projections to help them manage daily cash,
and long-term (annual, 3-5 year) cash flow projections to help them
develop the necessary capital strategy to meet their business needs.
They also prepare and use historical cash flow statements to understand
how they used money in the past.
