Cash Flow Management

The practice of monitoring, analysing, and optimising the timing of money coming in and going out of a business to ensure it can meet obligations and fund growth.

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● Summary

The practice of monitoring, analysing, and optimising the timing of money coming in and going out of a business to ensure it can meet obligations and fund growth.

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What This Includes

Invoice management and payment terms
Cash flow forecasting and 13-week rolling models
Debtor and creditor management
Working capital optimisation
Cash reserve planning

What This Excludes

Profit and loss accounting
Tax planning
Long-term investment strategy
Equity financing

Common Misconceptions

Profitable businesses cannot run out of cash — they absolutely can
Cash flow management is just chasing invoices — it is much broader
Only big businesses need cash flow forecasting — SMEs benefit most

Business Impact

Poor cash flow is the number one reason Australian SMEs fail
Businesses with active cash flow management are 30% more likely to survive their first five years
Significantly more likely to fund growth from operations rather than debt

Practical Checklist

Set up a 13-week rolling cash flow forecast
Review accounts receivable weekly
Negotiate payment terms with top 5 suppliers
Automate invoice reminders
Build a cash reserve target of 2-3 months operating expenses
Review pricing annually for margin erosion