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Managing Money
Cash is the main basis of financial management in a new company. In most instances, the period between payment of suppliers and employees as well as a collection of debt from the customers is often a challenge. The solution to all these financial challenges is sound financial flow management. Managing of cash flow means delaying expenditures of cash and at the same time ensuring anyone owing the business pays up rapidly.
Managing Cash in a new business
Measuring of cash flow is necessary as accurate financial flow projection helps the business owner to be aware of an upcoming business challenge before it happens. On the other hand, cash flows should not be used to gauge the business environment in the future. There are a number of elements that need to be considered to counter the challenges. The factors are evaluating the payment histories of the customers, business thoroughness in identifying upcoming expenses, and the patience of the business vendors (Land & Taylor 2010).It is also crucial to ensure...
Payables need to be extended as they have been in the past including expenses like capital improvements, principal expenditures, and loan interest, as well as accounting for periodic sales fluctuations.
Starting financial flow projection by addition of cash at hand at the start of the period with other receivable cash from other sources, needs to be a priority. The situation is significant as the process assists in gathering data from salespeople, collections, service representatives, credit workers and the finance department. Another element in making accurate financial flow projections is to have detailed knowledge regarding the amount of cash and dates of future cash outlays. This means having an idea on how the total expenditures in the business by having a line item on the business projection for each capital outlay such as rent, wages, inventory salaries together with other taxes that have been withheld or paid.The simple idea…
References
Stone, R. (September 01, 2001). Managing wealth: A new approach. Journal of Financial Services Marketing, 6, 1, 84-97.
Land, C., & Taylor, S. (January 01, 2010). Surf's Up: Work, Life, Balance and Brand in a New Age Capitalist Organization. Sociology, 44, 3, 395-413.
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