How to maintain a healthy cash flow

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Every business owner must have a strong enough control over accounts receivables and accounts payable so that every 30-day cycle runs smoothly and bills are paid on time.

By Ken McEntee

A strong order book may lead you to believe that your business is in tip-top shape.

However, warns Gary Cerasi, CPA and owner of Creative Business Strategies, regardless of how busy you are, a weak cash flow can cripple your company. Here, Gary offers tips about maintaining a healthy cash flow.

Q: What exactly is cash flow?
A: It’s the money you have available to pay your bills.

Q: How do you know if your cash flow is sufficient?
A: I suggest all companies have 90 days worth of bills on reserve to cover for lean times. A line of credit can be a Band-aid, but it is not always the whole solution.

Q: What can happen when your cash flow is poor?
A: Paying vendors late can harm relationships and increase your costs. A vendor who is paid late will most likely add on a finance charge which can impact your profit margins.

Q: What should a business monitor in terms of cash flow?
A: Every business owner must have a strong enough control over accounts receivables and accounts payable so that every 30-day cycle runs smoothly and bills are paid on time. Speeding up your own collections also is vital.

Creative Business Strategies has numerous techniques that can help you to improve your cash flow, both in business and in your personal life.

You can find out more by scheduling a no-cost consultation with Gary, at 440-546-9359. Creative Business Strategies is located at 192 East Wallings Road, in Broadview Heights. You can learn more at CreativeBizStrat.com. You do not have to be a business owner to benefit from Gary’s expertise.

Categories: Westside Professional Services