r's evaluation of your business's cash flow numbers, a small community bank might consider an acceptable working cash flow ratio X the amount of available cash at any one time in relationship to debt payments X to be at least 1.15:1. As most lenders are aware, cash flow also presents the most troubling problem for small businesses, and they willtypically require both historic and projected cash flow statements. Managing Your Cash FlowA healthy cash flow is an essential part of any successful business. Some business people claim that a healthy cash flow is even more important than your business's ability to deliver its goods or services! That may be placing a bit too much importance on your cash flow, but consider this X if you fail to satisfy a customer and lose that customer's business, you can always work harder to please the next customer. But if you fail to have enough cash to pay your suppliers, creditors, or your employees, you're out of business! No doubt about it, proper management of your cash flow is a very important step in making your business successful. Understanding cash flow is the first step in effectively managing your cash flow. There's more to it than just a fancy term for the movement of money into, and out of, your business checking account. Analyzing your cash flow will help you spot some of the problem areas in the cash flow cycle of your business. As in any good analysis, you need to look individually at each of the important components that make up the cash flow cycle, to determine if it's a problem area or not. A cash flow budget is good way of predicting your business's cash flow for the next month, six months, or even the next year. Check out the Business Tools area if you want to prepare a cash flow budget for your business. We've taken care of some of the work for you! Improving your cash flow will, without a doubt, make your business more successful. Accelerating your cash inflows and delaying your ca...
