10 Golden Cash-Flow Rules

How to make your business’s cash flow strong and steady? The best way for that case is by getting it organized first in your mind. You should honest to yourself about what happening now, and realistic to the future. Then, follow these 10 rules to get there.

1. Stash Cash
Running out of cash is the absolutely worst thing that can happen to your business, especially if you are working on revamping your cash flow. Figure out what you can do to have some extra cash on hand, and then do it. Where can you cut back on waste? Is there another vendor that can give you a better deal? Stash those savings as soon as you can and then keep them on hand for when cash times are tight.

2. Respect the Cash
The cash your business has is truly the lifeblood of the enterprise. If your company runs out of cash or does not appreciate the role cash plays in your everyday flow of operations, you are in serious hot water.

3. Become One with Your Cash Reserves
Do you know what your company’s cash balances are right now? If you do, good; if you don’t, why not? Knowing what your cash reserves are at all times will keep you grounded in your business dealings by not overpromising and under-delivering, or making generally unwise business deals.

4. Know Your Limits
Make sure your books in general, and your cash accounts in particular, are in order. If you do not know how to maintain your accounts, or if you simply aren’t up to the task, hire someone else to do it. Whatever you do, DO NOT simply leave your accounts unaccounted for. You will pay dearly if you do.

5. Stay Organized
One of the first ways to get confused or think you have more cash than you do is to keep your accounts, records, and files untidy. Take the time to organize your business information and then continue to take the time to keep it organized. Having inaccurate or inadequate records will sink your cash ship every time.

6. Do Not Balance from the Bank
One mistake many businesses, and individuals, for that matter, make is to balance their books from the bank’s balance sheet. While that is perfectly acceptable when it comes to double checking accounts receivable and payable and to reconcile accounts, you never want to rely on your banking account information to help you make smart decisions about your cash accounts.

7. Set a Goal–and then Achieve It
Decide where you want your cash account to be three months, even six months, down the road. Then, get organized; know what you have to do to get there. Be honest about your current cash situation, be realistic about your goals, set a budget, and then stick to it!

8. Expect the Unexpected
Try to plan for every eventuality: machinery going down and needing repair or replacement, employee shortages and surpluses, fluctuations in inventory. This really comes down to knowing your industry, knowing your market, and knowing your business.

9. Make Cash Flow Projections
Sure, these are a pain in the neck, but in the long run, you’ll be glad you did them!

10. Relax!
Worrying about your cash flow can become overwhelming. Deal with it and then set it aside; worry more about running your business, pleasing your customers and clientele, and making money!

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