Got Cash? 3 Tips To Manage Cash Flow

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Cash flow management is critical for any business's success. According to efinancemangement.com “The fundamental goal of cash flow management is to ensure that the incoming flow of funds is always greater than the outgoing so that the business sits on a surplus. 

Here are 3 tips to help you to achieve this goal:

Tip One - Create an emergency fund for your business

According to PNC Bank, “Surveys show that 17% of business owners say that if faced with two months of declining revenue they would have to close, and other statistics show that 25% of businesses won’t open again after a disaster.” Think about what happened as a result of the pandemic. The first step to creating an emergency fund is understanding how much you need to operate each month and how many months you would like your emergency fund to cover.

Tip Two - Create a Budget

This tip goes hand in hand with creating an emergency fund. This is about going deeper to dig out specific information to create categories of spending so that you can create a plan that is realistic based on your past experiences.

Tip Three - Track Your Money 

This one is the most important tip because if you don’t know where your money is going you can’t create a plan for it. 

Successful cash flow management is key to running a successful business. It starts with getting clarity about the current status of your finances. Additionally, creating an emergency fund and a budget will help you to achieve your goals and stay cash flow positive.

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