In addition to having interesting ideas, business owners also need one other important thing, namely capital. Yup, without funds, you will find it difficult to carry out the business plans that you have made. Therefore, when running a business, you must manage your business cash flow. Let’s get to know more about cash flow in business!


What is cash flow?


So, cash flow aka cash flow refers to funds received or issued by a company or business sector. The funds spent are used for various business interests, starting from purchasing production equipment, renting a place, as well as marketing costs. Meanwhile, the incoming funds come from sales profits.


Usually, cash flow is used as a reference to find out the condition of your business. You see, the funds available to your business will show whether your business is progressing or not.

[Also read: Non-Cash Payment, Effective Solution to Overcome Payment Problems]


How to know cash flow?


As already explained, the cash flow of a business can show the condition of your business. To monitor cash flow, you can calculate based on the difference between the funds available in the initial period (opening balance) and available funds at the end of the period (closing balance).


So, how to determine the period? Actually, you can determine the period yourself based on your preferences, for example every one week, one month, or two months.


If the difference in funds obtained is positive, it means that your cash flow is maintained at the end of the period. On the other hand, if the difference in funds is negative, it means that you have to try to stabilize the cash flow again. You see, a negative cash flow indicates you have smaller funds than at the beginning of the period.

[Also read: 5 Effective Steps to Manage Business Finance in the New Normal Era]


Find out where your business funds are coming from!


In order to be able to practically monitor cash flow, of course you have to know where your business funds are coming in and going out. So, make sure to always monitor your daily business transactions. To find out business income, you can use Cashlez Reporting feature! Meanwhile, Cashlez also provides profit and loss features in the Premium POS application so that you can more easily manage cash flow.


Is your business cash flow healthy?


Although cash flow is not the only measure of business success, good cash flow will give you many opportunities to expand. On the other hand, when your cash flow is disrupted, it will be difficult for you to realize your plans. Therefore, make sure to have a positive cash flow!


So, what does healthy cash flow look like? So basically, the funds that go into your business account must be more than the funds that go out. Through a healthy cash flow, you can run a business sustainably. On the other hand, negative cash flow can actually hamper your business.


Apart from seeing the cash flow based on your expenses and income, you also need to make sure that you and your entire staff can try out new opportunities quickly without spending a lot of money. This strategy is one of the best ways for you to achieve your goals, both in the short and long term.


As an important aspect of business continuity, business actors must always monitor their cash flow. In addition, to manage cash flow, it is also necessary to be able to adapt to market needs. So, have you monitored your cash flow regularly?

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