For any business, cash is king!

 

Cash flow is the movement of cash in and out of your business. Cash is the blood on which a business needs to survive on a daily basis.  Cash flow has always been the biggest pain point of SMEs and one of the main reasons why SMEs are unable to cross the 5-year time frame.

 

Many financial experts suggest that businesses must assess their cash flow on a daily basis.

 

Cash flow balance = Cash inflow - Cash outflow

 

Cash inflow includes cash received from customers, investors, owners or bank loan.

 

Cash outflow includes payment to suppliers, rents, interests or withdrawal of cash by owner.

 

Thus, making a lot of profits do not translate to healthy cash flow if most sales come in a form of accounts receivable.

 

6 Tips to prevent cash flow problem

 

  1. Lease assets such as equipment, vehicles, or program license when possible.
  2. Cash in on assets when it’s not in use or no longer needed.
  3. Negotiate for credit terms for accounts payable in advance without trading off good relationship with suppliers.
  4. Long-term finance of assets such as real estate or equipment rather than purchasing using your working capital.
  5. Track and collect receivable quickly.
  6. Implement a better system to manage cash flow as using a spreadsheet to track every cash inflow and outflow transaction daily is very time-consuming.

To grow your business, there is a way to cut the long route by employing NESTED. This cloud computing solution will provide a real-time view of your cash flow. At anywhere any time, you’ll know the available cash for your business.