Cash Flow Management: Learn How to Do it in Practice

Cash flow management is an essential part of efficient corporate governance. It involves strict control of the financial transactions of the business, which demands constant attention to the inflows and outflows of money that, due to the most different factors, do not follow an exact frequency.

Sales peaks on special dates, for example, are atypical situations that create a different movement in cash flow. Therefore, the ideal is to do a daily analysis to obtain more secure information. Only in this way is it possible to draw a realistic picture of the business, ensuring a better organization of income and expenses.

Therefore, the cash flow is composed of key steps: receipt, management, payments and inventory control. When all these steps are carefully planned, cash management solution for businesses become much more efficient, enabling business success.

Do you have questions about the best strategies to follow to manage your microenterprise’s cash flow? So check out some essential practices that we separate especially for you to apply in your business right now!

Understand the objectives of cash flow management

It is very common for companies, especially small ones, to face financial crises that could have been mitigated or even avoided with more effective cash flow management. Understand now: poor financial organization can result in debt, lack of resources for investments and business expansion, as well as bankruptcy .

There’s no mystery: controlling the inflows and outflows of resources in previously established periods is what will ensure safer management, resulting in greater stability in crisis situations . Not to mention that understanding cash flow is essential to plan the company’s next steps and optimize revenues!

In order for the analyzes to be really in line with the reality of the business, it is important to record absolutely all financial transactions. As insignificant as the values ​​may seem, any accounts, whether payable or receivable, loans or investment income, for example, need to be properly related so that the manager is aware of everything.

Determine the period in which the flow will be evaluated

For a more accurate assessment of cash flow, start by determining how often the analysis will be done. As each company has its operating particularities, this period can be weekly, biweekly or even monthly. Remembering that it is important that this period does not exceed one month so as not to disturb financial control.

When defining the period in which the data will be analyzed, all records must be done in an orderly manner. That way, when the end of the period arrives, the manager will quickly have all the information needed to be able to analyze the cash flow.

Contrary to what inexperienced administrators may think, cash flow management means taking action and not just visualizing data. The manager needs to schedule his purchases, investments and payments in order to guarantee a positive balance at the end of the month. For this, it will use the cash flow information.

Record all cash movements

In order to arrive at the real value of the cash flow, obtaining the resources available to the company, it is necessary to determine the difference between all amounts received and payments made in a given period. It is worth remembering that the cash balance does not exactly mean that the company is making a profit or not, ok? That is why analyzes by periods are important, even being able to demonstrate seasonality, for example.

When the balance appears negative, some of the possible causes that should be investigated are delinquency, delay in receipts and very long receipt deadlines . On the other hand, if the company has a sporadic increase in sales and is not organized, cash flow failures may also occur.

To minimize the risk of distorted analyses, it is advisable that, in addition to recording all the company’s financial transactions, the following steps are taken into account:

  • daily record of all inflows and outflows of values;
  • projection of future payments and receipts;
  • daily and future balance analysis;
  • alternatives with the use of working capital in situations of deficit;
  • alternatives for investments in surplus situations.


So you already know: don’t fall into the mistake of not recording small amounts in cash flow management. After all, when all of them are added at the end of a period, they can represent an important difference, whether positive or negative. Furthermore, it is good to remember that records help to avoid waste.

To make this routine easier, organize your cash in and out information into categories. In this way, it will be simpler and more intuitive to identify what represents the biggest expenses and also the main sources of business resources.

Control the company’s stock

Some managers forget that the company’s inventory control also needs to be done strategically. The logic is as follows: everything that is part of the stock must be considered as capital. The difference here is that this capital does not result in income or interest, for example.

As the inventory is part of the company’s working capital, it is consequently also part of the cash flow. Ensuring a good organization at this point, the manager will know the exact moment when he needs to buy more items or even devise strategies to increase sales of a certain product.

At first glance, excess inventory may seem positive for the company, but don’t be fooled. Remember that everything that is there represents money that cannot be used either for investment or paying bills. The ideal, therefore, is that the stock has a fast turnover, ensuring greater speed in the return of the money invested.

Invest in good management software

Last, but definitely not least, don’t forget that technology can help (and a lot) to optimize the management of not only cash flow control, but corporate administration in general. As much as expense control can be done manually, management software offers not only much more agility and precision, but also infinite possibilities for verification and analysis for the business.

To professionalize and streamline the control routine, online management systems emerge as great allies. And the good news doesn’t end there! As today there are several alternatives on the market, each company can find a solution that is most suitable for their reality without major headaches.

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