Cash flow Management – Helps you Take your Business to the Next Level
What is management? In simple English management means managing men tactfully. But there are different aspects of management and one of them is cash flow management. So taking the same description we can say that cash flow management means managing the flow of cash in your business tactfully. But what is it that needs to be managed in cash flow? If there is significant growth in your clientele then the revenue generated will be more and automatically the inflow will be more than the outflow resulting in you earning more on a regular basis. Theoretically yes, on a utopian scenario this theory fits in perfectly right. But in the real world scenario the case is totally different. Even after a significant in the number of clients and revenue generated many businesses are not able to see the kind of growth they expect to see or can see. The problem is that many businesses do not know that the real problem lies in their cash flow management. They do not even realize that there is something terribly wrong with their cash flow management. Usually the sudden stagnancy in the growth after all the hard work of starting the business is due to lack of cash flow management from the side of the businessman.
It is very important to sort out cash as and when it comes according to various expenses, like operating expenses, marketing expenses, administrative expenses, investment, payment of debt and bills. And if that is done in a seamless manner then the business runs smoothly and goes to the next without any or very less effort. But that is rarely the case. In the actual scenario due to the pressure and crunch of time to make decisions due to rapid work and cash flow, cash flow management is usually taken for granted or neglected with the assumption that things are under control as there is a regular influx of money into the business and all the expenses are being taken care of. But when these factors together reflect, either positively or negatively then the growth or expansion and the rate of it comes into the picture.
The story is different with companies which are big and established. For them there is a specialized team working day in and day out on cash flow management. But when it comes to small and medium company they cannot afford to have specialized team to work on their cash flow management regularly. Due to the hectic operational schedule and the day to day operational activities the owners of these business units also cannot spend a sizeable time to check the cash flow on a regular basis or work on it from time to check the cash flow. What should the small and business owners do then? They can have software’s like cash flow Mojo software which can help them to the planning and managing of their cash flow with relative ease.
How do these softwares help the small and medium businessmen in solving their cash flow management problems? Softwares like Cash flow Mojo helps you keep a track of each and every financial transaction that happens on a daily basis. Whether it is related to income or expenditure and whether it is a big ticket item or whether it is a petty cash item. But why is it necessary to keep a track of each and every petty cash item too. Let us take an example of buying a pen which costs only $1. When it comes to expenses related to business then $ 1 is not a very significant amount and can be easily let go of. But if the same $1 is spent every day three times continuously for a period of one year then the same 1$ expense will become an expense of around $1000 and suddenly without even you knowing it the same $1 non significant expense become a very significant big ticket expense. That is why it is advisable to note down each and every expense made by you irrespective of the dollar amount related to it. This will help you understand the key pain areas in your finances and will help you in minimizing your expenses significantly. These softwares also help you to project the future growth of your business unit and also help you to take the necessary step to increase the rate of growth of your business.
The best way to assess whether your business is under your control and you are able to steer the pace in which it grows is by seeing whether you are able to understand the process of your cash flow. And to be able to understand the process of the cash flow of your business you need to have the process of cash flow management in your hand completely. Then as a decision making authority of your company you will be able to make the right kind of decisions, of course with the help of your management team. When you have the cash flow management software installed then you will be able to reap the benefit of it for future financial planning and for keeping a tab on your day to day expenses and will also help you understand whether the revenue generation is enough to run your day to day operational activities. So if you want your business to grow and expand at the pace that you want it to grow then you should be having cash flow management software which helps you do your planning and financial forecasting.