There are basic methods that small scale organizations prefer to follow for cash flow purposes. Certain methods will offer such organizations benefits like helping them identify when it shall require cash and other devise ways of generating cash; providing an understanding of the ideal time to freeze further investments like venturing new projects, employee hiring and business expansion, etc.; helping in planning loans, eliminating uncertainty arising out of availability of cash balances and improving visibility in cash flow issues.
- Creating contingency Plans: It is always safer to create emergency plans for the best and worst events.
- Making Financial Projections: Forecasting cash revenues and expenses over a period of time to anticipate when a company might fall short of cash and when they might be left with a surplus.
- Cap on expenditures: curbing unnecessary expenditures are a key to successful cash flow management.
- Raising invoices: Simply raising invoices can make a difference. It helps create policy to declare time limits for customer’s payments and ensure fluent follow-ups on overdue receivables.