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Cash Flow is Still King

It’s been said, “Cash flow is king.” Here are tips that can help business owners start managing their cash flow more efficiently.

It’s been said, “Cash flow is king.” The truth is: cash flow is one of the most critical components of success for small or mid-sized businesses. Oftentimes, it’s the simple things that can do the most damage to your financials.

 

Tips for Efficiently Managing Cash Flow

Here are three tips that will help business owners start managing their cash flow more efficiently:

 

1. Be involved: There's no alternative to being involved. It sounds really simple, but all business owners need to understand the financial bottom line of their business. Having a bookkeeper isn't enough; you need to completely understand your business' financial position.

 
Some business owners hesitate to get down in the weeds of the books, but you need to spend time regularly going through your financials. Too many business owners avoid this because they feel they’re too busy or have concerns about what their books might tell them.
 
Maintaining an open dialogue with your bookkeeper or CPA on a consistent basis is essential. Meet with them monthly (or at least quarterly) to monitor the business’s financial health and make sure you know where you stand at all times.
 

2. Have a Plan: All businesses should be planning ahead for their future cash flow needs, as well as handling their cash reserves.

 
Every company is different, so there isn’t just one general rule. It makes sense to think ahead at least three to five years to strategically address your potential cash flow requirements.
 
Of course it also makes sense to periodically evaluate your business model and make changes as needed. Maintain a good working relationship with advisors such as your banker, CPA and attorney in order to evaluate these changes and react accordingly.
 

3. Use the Tools Available to Help You: There are a number of business-banking tools available to help business owners efficiently manage - and even protect - their operating cash flow. Cadence Bank offers tools that will help make collecting your receivables and managing vendor payments easier, among a host of other cash management tools.

 

Your bank may offer services and products like Remote Deposit Capture and Lockbox to help expedite how a business receives funds, as well as Purchasing Cards and Automated Clearing House (ACH) to improve the payables process. Services like Positive Pay and ACH Positive Pay help protect businesses against fraudulent transactions.
 
Don’t hesitate to contact one of Cadence Bank’s knowledgeable bankers who help you map out a cash flow strategy that makes sense for your business.

 

 

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.



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