Learn how to organize your company’s cash flow

In the financial management of your company, it is essential to seek tools that optimize your organization, allowing good planning and helping in decision making. In this sense, one of the most indicated is cash flow.

In today’s post, you will understand how to organize your company’s cash flow, some of its main features and what you need to observe to boost the use of this tool in managing your business. Follow!

1. Understand cash flow

Understanding cash flow is one of the first steps towards a successful implementation. The records must contain the balances of current accounts and short-term or easily redeemable investments, which are known as cash equivalents. These values ​​should be related, as they can be easily converted into cash.

Inputs are also part of this tool and represent receipts from a company, whether from the sale of products or services. In addition, outflows must be accounted for, that is, disbursements related to payments for purchases made, employee salaries, electricity, water, telephone and internet consumption bills, taxes, among others.

2. Implement cash flow

You need to understand the implementation of a cash flow tool. With the help of an electronic spreadsheet or integrated management software, it is necessary to register all the financial transactions of the period.

After proper registration, the opening balances of cash and equivalents, plus inflows minus outflows, should be compared, which will indicate the cash flow for the period. This value is the available balance that your company has to invest or spend according to your needs.

3. Choose a period to start your records

For your cash flow to be implemented, it is necessary to define a date for the beginning of the records, that is, a cut-off date. From that day on, all financial transactions, including your cash availability and those in your bank accounts, must be registered.

In addition, from that moment on, attention must be paid to recording all incoming and outgoing movements, regardless of their value. Here it is important to record even values ​​that seem insignificant, since at the end of the period calculated they can have a major impact on your finances.

4. Separate personal and business finances

Separating personal and business finances is a basic rule of thumb for implementing cash flow . For this separation to be more effective, it is necessary to create and use separate checking accounts, credit and debit cards, which helps to avoid asset confusion.

This is necessary so that you know how your finances stand quite clearly and accurately. In addition, it serves to have a clear notion of how much resources are actually available or if there is a lack of them in your organization.

5. Be Detailed

Being detailed in cash flow, in addition to organizing your finances, helps with your financial planning. This is because a very detailed cash flow will provide as much information as possible, in case it is necessary to consult or understand any of the entries that were made.

The detailing will also help in the elaboration of the categories of expenses and revenues. These are essential when making a managerial analysis of your expenses, in order to understand where the money comes from and where it goes in your company. Based on this, it is possible to make objective and timely decisions.

6. Update cash flow daily

There’s no point in implementing cash flow if it doesn’t reflect, in real time, how your finances are doing. Thus, it is necessary to insert in its organizational culture the need for checking and daily inclusion of information in the cash flow.

To do this, define in your routine the time for checking cash flow, bank statements and receipt payment reports, as well as crossing the records of all this information.

7. Keep an eye on stocks

If your company has stocks, you need to be constantly attentive, that is, observe information on how long items take from their purchase until they leave your company. The key word here is balance, as goods that are out of stock can mean losses and the lack of them can also negatively impact your business.

With up-to-date and very detailed cash control, you will be able to understand how your sales are doing, which products are sold the most and which ones take longer to come out of stock.

Based on this, you will be able to create different sales strategies, involving different prices, discounts and special conditions to avoid merchandise stopped in your company. You will also know which ones are consumed more quickly and you will be able to replace them, avoiding running out of products for your customers.

8. Be careful with post-dated checks

Post-dated checks, both issued and received, deserve special care when preparing the cash flow. It is necessary to be very careful in registering these, as it should only occur when they are effectively discounted at the bank.

To avoid problems with checks, try to make a separate control, both those you issue and those you receive. Thus, when it is discounted, you can affect your cash flow control, either by cash inflow or outflow.

9. Categorize income and expenses

Now that you know everything about cash flow, how about using it as a management tool? To do this, just create categories of inputs and outputs separating the elements by type. Thus, you will be able to know, for example, who your main customers are, the value of the average ticket and other important data for your management.

The outputs will indicate your main expenses, which allows you to understand how your company is using the money, if any cuts, replacements or reductions are needed, among other strategies to improve your results.

10. Analyze and correct financial planning

In addition to detailing and knowing income and expenses, you will also be able to carry out your financial planning and, if necessary, correct it. This will make it easier for you to put your business on the right course again.

Here it is possible to use the cash flow projection that shows, in advance, how the company’s finances will be, its inflows and outflows of resources. In addition, it verifies whether there will be financial gaps or the need for capital, which allows the search for better rates, conditions and payment methods.

In this post you understood how to organize your company’s cash flow. It was possible to understand what this tool is and how it should be implemented in your company. In addition, care was highlighted such as detailing, daily recording and attention to stocks.

Finally, it was found that you should be especially careful with post-dated checks and that the cash flow can be used as a true management tool, allowing you to detail your inflows and outflows and can be used in your financial planning.