Cash Flow Management
The simplest way to define cash flow is the movement of money in or out of the business during a pre-specified time. Keeping a close track on fund flows is crucial for the business to understand its liquidity as well as take sound financial decisions.
Benefit of Preparing Cash Flow Statement
While preparing a cash flow statement the major goal for a business is to enhance the use of funds. Cash flows help a business to speed up collections, avoid unnecessary and early disbursements and to and ensure efficient utilisation of idle funds.
Another major advantage of preparing cash flow statement is minimising operational cost. Cash flows to also aid in routinizing the cash flow process and minimizing the time and involvement of the company’s management into routine, mundane process.