As we know, cash flow is the money that enters and leaves the company for a certain period. If proper management is not carried out, liquidity will be affected and payment defaults will occur, thus generating a loss of trust with suppliers.

Guide to improving business cash flow

It is essential to maintain a good Cash Flow, for this reason, we share some ideas that will help you optimize it:

Perfect the collection system

Looking for ways to manage the way we collect collections differently can be positive, but it can also cause problems with our clients if the solution is too aggressive.

Have updated and reliable Financial Statements

The basis of cash flow is the company’s Financial Statements, therefore, it is essential that they are kept correctly and up to date, otherwise they will not be of much use for the company. flow construction. It is common for SMEs to review financial reports two or three months late, but this practice is inadequate because it does not allow cash needs to be foreseen in the short and medium term.

Properly manage inventory

This aspect is relevant when managing cash flow, especially in companies that sell products, which is why it is necessary to control inventory, know which products have high turnover, which ones sell faster and in this way have greater cash movement. Likewise, those products that take more time to sell.

Diversify suppliers and clients

Concentrating on a few clients is a risk for the operation of a company, especially in terms of its sustainability, to the extent that income will be highly concentrated and if any client decides to terminate the contract or falls behind in The payments will affect the entire flow of resources of the organization.

It is also advisable to constantly evaluate suppliers, not only in terms of costs but also quality and compliance. Searching for new supply alternatives could generate benefits when negotiating the costs of the goods or services required, as well as payment terms.

Control expenses

When you are a small business, it is important to control well how the resources you have are spent. Invest only in what is a priority and necessary for the survival of your business.