Manage the Cash Flow Inside your Company

If your company is large enough to have employees, you will need to manage the cash flow inside your company. Who handles cash in your company? Cash comes in the form of purchase orders, check writing, c.o.d. deliveries, ordering lunch for the office, or customers, etc. The size of the company and the duties that are delegated to employees will determine who is handling your cash.

If you have budgets for each department regarding spending, it should be easy to monitor the progress. Weekly, Monthly or Quarterly reviews will help you keep the spending in line with the budget. Daily reporting of what has been purchased can be transferred to the companies cash flow forecast for future planning. These ideas can help facilitate a larger purchase of equipment if it becomes necessary.

All companies have cash intensive times when the business cycle changes with the growth cycle. The growth cycle pertains to employment, income, and purchasing of capital equipment to grow a company or a nation. The business cycle follows the growth cycle needing to keep up with growth by spending on the items that will help it grow. Once the buying stops and the growth cycle peaks, the business cycle will follow it down.

Keeping track of who is responsible in your company for cash flow forecasting and actual spending will help the company recognize when the business cycle is slowing. Company CFO’s and Owners need to be aware of the cash flow policies and practices that go on inside their company.