Good Cashflow Management
Essentially cashflow is the term used to define the flow of cash running through your company. A business can succeed or fail on the strength of its cashflow management. Therefore, from the point of company formation, it is vital you are aware how much money your business has and how much it owes, on a daily basis.
Having a healthy cashflow is never more important than when you initially form a company and start a business.
The Importance of Planning
For many companies, short term cashflow issues can be resolved, if they are managed and planned for effectively. This is one of the main reasons why it is important you keep a daily account of sales, profits and outgoings. Knowing when your company is likely to face some cashflow difficulties will enable you to plan for how you are going to deal with the issue; whether that means extending existing finance arrangements or negotiating re-payments with suppliers.