Manage your business and personal cash flows

Be prepared for fluctuations in your cash flow

Every small-business owner knows that cash flow management is critical. Having lag time between when you pay your suppliers and collect payments from your customers creates immediate cash-flow issues for small operators. It’s also common for small businesses to experience unexpected outgoings and dips in sales at times.

It’s important that you have enough cash available to ensure that your business and personal expenses are covered in the event that there is a shortfall in your business. This will ensure you’re able to keep operating without going into debt or receivership.

To mitigate any issues with cash flow it’s a good idea to prepare cash flow projections for your company. A cash flow projection will enable you to predict what money you’ll have coming in and going out of your business so you’re better prepared, and aren’t so likely to be caught short.
 

To learn more about how to forecast your cash flow, go to the business.govt.nz website.