Are you lost in cash flow? Almost 30% of companies go bankrupt due to poor financial management! Swim in cash flow like a fish in water 😉, with our academy.
In cooperation with Pavlina Vancurova, Ph.D., specialist in business economics from consulting firm PADIA, we have prepared CAFLOU® cash flow academy for you, the aim of which is to help you expand your knowledge in the field of cash flow management in small and medium-sized companies. From basic information to advice, tips and tutorials..
🎓 CAFLOU® cash flow academy is brought to you by CAFLOU® - 100% digital cash flow software
To make the process of clarifying the unknown in the area of cash flow as easy as possible, we have selected the 10 most common mistakes in cash flow management you should avoid if you want to be a truly successful entrepreneur.
💾 Also available for download as an e-book.
Planning the company’s financial situation is useful at all times. But how best to grasp cash flow, and how to start planning it at all in the first place? This article will show you how to do it. You will learn where to start if you finally want to plan your cash flow and keep looking ahead.
💾 Also available for download as an e-book.
Is your business in crisis? Are you deciding how to get out of the crisis? Are you trying to reduce the negative impact of the crisis, but are you running out of ideas? Has the crisis already affected your cash flow and are you afraid of the company going bankrupt? Or do you have an intensive feeling that the crisis is just around the corner and are you looking for ways to prevent its negative impact? Then read our action plan.💾 Also available for download as an e-book.
💡 Have you already tried CAFLOU® - the 100% digital cash flow software ❓
Cash flow is the lifeblood of any company. Without money, your business will die. The most common of all the reasons why companies go bankrupt is insufficient money income. So, it’s definitely worth keeping your cash flow under control.
What can you do to keep your business cash flows under control? You can keep handwritten or Excel records of individual payments. Or you can take a smart approach and use the information that you already have about the company, for example in a smart application. You can make your work easier and use information about your company, customers, suppliers, contractors or projects which you could track, for instance in Caflou.
Imagine two companies making the same profits; even the book value of their assets is similar. Which of them is more successful and heads towards long-term growth? To evaluate the economic side of business, it is necessary to decipher which activities provide flow of money into or out of the company.
You already know from our Caflou Academy that strategic cash flow management is an essential part of managing a successful company. But how to start managing cash flow so that it does not mean additional administrative burden? Take full advantage of automation and the possibilities of information systems. What are the possibilities of using a spreadsheet, such as Excel, an accounting system or a specialized software?
Effective cash flow management is essential to ensure the success of small companies or enterprises. The ability to effectively track your business's spending and earning allows you to predict and budget the money that you will need in the future. Not only that but with effective cash flow management, you can foresee and create opportunities for your business.
Seasonality in orders or in production, delay of payments from a major customer, unexpected expenses for equipment repair. These are just a few common reasons why particularly small businesses can run into significant financial difficulties. Here are some tips on how to deal with such situation.
Cash flow management is sometimes called working capital management or liquidity management. Whatever you call this crucial activity, it consists in maintaining the ability to pay the liabilities and in the development of the company. The largest companies in the world with very effective liquidity management are able to plan cash flow with a 3-month outlook and an accuracy of about 95 %. Even if you manage to plan with less accuracy, reliable cash flow planning will become a source of your competitive advantage.
Different methods are used for cash flow predictions. We offer a selection of best practices so that you can prepare a cash flow plan yourself using the planned income statement and base it on consideration of future investments and credits.
You often ask us questions about cash flow management and planning. We asked Pavlína Vančurová to answer the questions we most often hear from customers and users of Caflou. Pavlína is a lecturer in economic topics and a consultant in corporate finance, who provides the Caflou Academy with professional guidance and creates its content.
A well-established system for monitoring and evaluating a company’s economy therefore focuses not only on revenues and costs, but also on cash flows or cash flow.
Every entrepreneur wants to have an economically successful company. A lot of attention is paid to profit and income statement. Nevertheless, a company that has a book loss can survive on the market for several years. However, a company that does not make money often goes bankrupt soon after failing to pay its liabilities to suppliers and wages to its employees. In an imaginary duel of money vs profit, money wins.
Insufficient cash flow is the most common cause of business failure. Therefore, manage and plan company’s cash flow so that you do not get into the sad statistics of failing companies. In the first part of a new series on corporate finance, or more precisely cash flow, we have introduced cash flow as the most important indicator of the economic success of any company.
With the growing number of warning signs of a deteriorating world economy, more and more managers are asking the right question whether their company is in sufficient financial condition to cope with the consequences of the recession, or how best to prepare so that their company not only survives the economic crisis but emerge stronger from it.
Cash flow management is also called working capital management or liquidity management. Whatever you call this crucial part of financial management, it is the company’s ability to meet its obligations and direct earnings to further company development. Reliable cash flow planning is an important helper in building and maintaining a competitive advantage on the market.
In most cases, poor financial management is responsible for the company’s bankruptcy, with the second most common cause being the low ability to respond to the current market situation, followed by a decline in sales as the third most common reason of bankruptcy. Therefore, most causes of bankruptcy can be prevented. Good financial management is very important.
Based on the previous parts of the series on corporate finance (Are you really making money? Take a look at your cash flow and Actively manage company’s cash flow), you were able to compile your financial overview of the income and use of money, broken down into operating, investment and financial cash flow, and also plan future cash flow using the appropriate software. Today, we will take a closer look at the operating cash flow and how best to manage it.
Financial management without information about future income and expenses can be compared, with a little exaggeration, to walking blindfolded. If you don’t know what obstacle awaits you ahead, you cannot effectively decide on the next step. Due to unavailable or insufficient information about funds available in the future, you do not know to what extent your current decisions will affect the company’s ability to pay its future liabilities. A well-prepared cash flow plan will allow you to remove the imaginary blindfold from your eyes.
Most entrepreneurs focus on profit. Are you one of them too? However, do you know how the economic category of cash flow differs from the economic result? What can you find out from the income statement? Does bookkeeping really say whether a company really makes money?
One of the important tools for evaluating the economic side of business is financial analysis. Maybe you use it yourself, and no doubt you have heard of it. We will advise you on how to set basic indicators of economic health and also incorporate cash flow indicators.
Profitability indicators show the effect that the company is able to achieve in the long run. In addition to the accounting profit, one of the significant effects is also cash flow, especially operating cash flow. And what cash flow-based profitability indicators should a responsible company start monitoring?
Indebtedness indicators measure the extent to which a company uses debts to finance its activities in addition to its own resources and also shows the company’s ability to meet its liabilities. These indicators assess the financial stability of the company and include a number of indicators. And what indicators should you watch to maintain proper financial stability?
A successful company can be even more successful. And the success goes hand in hand with the increased need for financing. In addition to growing profits and sales, receivables, goods and materials in stock, and work-in-progress, which tie up money, usually grow as well. How to improve cash flow so that it does not mean an expensive solution for the company?
The strategic management of the company also includes the management of the financial side of the business. Economic stability is also about when revenues will actually be collected and expenses paid, and what share of own and external resources is suitable for achieving economic efficiency.
Current market environment brings a number of risks that can significantly affect the achievement of planned results, be it financial risks, changes in exchange rates, commodity fluctuations, legislative changes or new technologies. Business owners and directors need to know what impact risks can have on the company’s economy. There is a solution in the form of a risk-based financial model.
What can you do to keep your business investments under your control? If you are going to further develop the company, for example by planning to expand the production portfolio, production capacities and equipment, warehouse space, or fleet, your priority will probably be cash flow. Investments are characterized not only by high capital intensity, but also by their long-term impact and relative irreversibility of the decision to purchase the investment. Cash flow management is a natural part of financial management of successful companies. This also applies to the company’s investment activities.
The COVID-19 situation affected almost all companies in the Czech Republic and abroad. Many companies have felt pressure on liquidity and sufficient resources. Do companies currently manage the decline in liquidity only thanks to financial reserves? What helped the companies that survived the economic crisis even without reserves the most? And to what extent did the need to consider a turnover in connection with the (un)certainty of orders, the number of days past due, or the approach of suppliers reflected in the management of their cash flow?
Financial professionals often use mysterious terms and abbreviations in connection with cash flow management. We hear and read about cash flow (CF), EBITDA, Free Cash Flow (FCF), OPEX and CAPEX. But what exactly do these terms, also used in common parlance, mean and how do they differ? We will clearly explain these technical terms to you so that you never get lost in conversation with experts again.
Before we were able to find our bearings in the consequences of the spring coronavirus crisis, its second wave was coming, and with it, uncertainty arose again as to how the economic situation would develop. In recent months, we have discussed the causality of the current crisis and the handling of financial management in consultation with many directors of Czech companies. Manufacturing, trading, and service companies were represented. We can therefore provide you with lessons learnt from the current cash flow crisis. Many inspiring conclusions emerged from the discussions, which we summarized in the following ten points.
Various tools are used for cash flow planning and analysis in companies around the world. A good cash flow plan needs not only income and expenses to be taken into account, but also the correct timing of the due date of issued invoices, payrolls and other payments with the due date of received invoices. Because the amount of money collected fluctuates more or less irregularly, the right tool is needed to enable the company’s management to act in a timely manner. Get inspired to choose the tool that works best for your business.