Managing Business Cash Flow

Managing cash flow ensures your business has enough money to cover payroll, paying bills and operating expenses – even when profits are down. Here are a few techniques you can use to track and manage inflow and outflow to maintain liquidity.

Accelerate Inflow

Keep cash on hand by getting paid as quickly as possible. You can help boost inflow by:

• Requiring a deposit or up-front payment
• Offering a discount or other incentive for paying early
• Requesting payment or sending an invoice immediately after delivering a product or service

Optimize Outflow

Hold onto your cash for as long as you can, while still paying your bills on time. Maximize working capital by:

• Taking full advantage of the number of days you are allotted to pay a bill, such as 30 or 60 days from the invoice date.
• Negotiating with vendors for payment windows that align with your revenue cycles.
• Regularly auditing your expenses to eliminate unnecessary costs.

Track & Forecast

Being able to anticipate cash shortages will allow you to make the necessary adjustments to minimize any negative impact. To track and forecast your cash flow:

• Create a cash flow statement that you can use to track exactly how much money is coming in and going out every month.
• Use dedicated cash flow tools to automate tracking and reconciliation.
• Plan for the future by building a cash buffer that’ll cover 3 to 6 months of operational costs if a difficult season comes about.

Questions?

City has a variety of business banking options to help set you up for success. Contact your local branch to learn about our business checking, savings, loan and cash management options.