A business cash flow cycle explains how cash flows in and out of a business. Usually, money streams through a business in a fairly predictable way. Finding the right balance of expenses, revenue and receivables is an important part of getting a business’s cash flow cycle right. When that balance is achieved, it allows businesses to make the right amount of purchases to continue with their operations smoothly.
Best-selling business author Josh Kaufman compared the
Whilst receivables look fantastic on paper, they do not translate into actual cash until the money is deposited into a business’s account. To have the optimum cash flow cycle, it is important to get the promised receivables translated into payments as quickly as possible.
To manage a business’s cash flow cycle better, there are numerous cash flow management techniques that can be implemented. But if a business is failing to manage their cash flow cycle effectively, it is definitely worth considering