Tout savoir sur la trésorerie pour réussir la gestion de votre entreprise

As a  business manager , your mission is to ensure the good management of your company to allow it to develop sustainably. To do this, many transversal missions must be carried out. It is therefore just as fundamental to find customers as it is to improve the productivity of employees or to  keep the accounts . And this last point is of particular importance. Financial management is indeed the real keystone of the good health of a company.

But  what is accounting? This particularly broad concept makes it possible to provide the entrepreneur with a statement of the financial situation of his organization in real time  . Accounting includes cash flow, another essential discipline aimed at ensuring the sustainability of a company. Find out everything you need for successful cash flow management in your business.

What is a company's cash flow? -1

Definition of a company’s cash flow

According to the media specializing in B2B Business owner, the  definition of cash  represents the total amount available for a company. This  definition of corporate treasury  can of course be clarified. It is important to note that for companies, this concept must take into account the money available in the till and on all bank accounts at a given time. In this definition of cash, this money is therefore accessible quickly and easily for the entrepreneur. This cash can therefore be used to meet unforeseen expenses or be invested in  financial investments  or in real estate.

Cash flow is an essential indicator for all structures in which money circulates, regardless of the sector of activity. More broadly than its definition, it is an effective tool for ensuring the financial equilibrium  of an organization. This financial management is generally entrusted to a chartered accountant.

What is the cash flow calculation?

Very simply, a company’s cash flow is calculated as follows: immediately available assets / short-term debt. In other words, it is important to differentiate between working capital and working capital  requirement (WCR). On a daily basis, the cash flow of a company is therefore required to vary according to income (turnover linked to sales made to customers, subsidies, bank loans, etc.) and expenses (fixed charges, product purchases, etc.). personnel costs, payments from service providers and suppliers, taxes and duties, etc.).

For optimal management, it is necessary to take into account the calculation  of the cash balance . This cash balance is simply the result between the outflows (disbursements) and the inflows (receipts) of money. Depending on the situation, it may therefore be in  surplus or in deficit . For optimal management, the business manager has every interest in investing  surplus cash  so as to benefit from additional remuneration.

To ensure that you have a faithful and realistic cash balance, it is essential to be exhaustive when determining receipts and disbursements. Note that all these financial data must be entered in TTC.

What is a company's cash flow? -2

What is the use of cash for a business owner?

The cash flow of a company is important because it makes it possible to make a short, medium and long term balance sheet   and to check its profitability. For the business manager, ensuring sustainable positive cash flow is the best way to carry out his development projects. This is indeed the sign of  controlled financial flows .

The concept of  cash management makes it possible to make the right strategic and operational decisions insofar as it offers perfect visibility on the financial situation of the company. For example, let’s say you plan to make an investment in at least January. If you expect to receive a large payment the following month, it will not be useful to turn to your bank to obtain credit or to seek short-term solutions to ensure your working capital. In this specific case, having a  cash budget  will prevent you from paying unnecessary bank interest.

Analyzing your  cash flow statement  can also highlight an upcoming deficit. You will therefore have to find solutions to ensure the financing of your activity in the short term. In such a situation, you have several options to make up your shortfall with money: take out a  bank loan , reduce business expenses, etc.

Likewise, ensuring that the company can be able to meet both planned and unforeseen expenses is a strong argument when soliciting partners or potential investors. They will appreciate the fact that you can  finance your business  and make investments. Finally, in the context of a  business creation , the design of a provisional cash budget is of course just as important.

How to manage the cash flow of a company?

To  calculate your cash flow , you can hire an accountant or do it yourself. Whatever solution is chosen, the design of a cash flow statement is inevitable. Many cash management software  offers such a tool. To give perfect visibility of the company’s  profitability  and its financial health, this table must be drawn up with great rigor.

It is therefore essential to accurately assess liquidity, both in cash and in the company’s bank accounts, and current and future expenses. All financial flows must be identifiable. Your cash flow statement should be as pessimistic as possible and therefore take into account certain  financial risks .

From one month to the next, the cash flow statement will offer you the possibility of  controlling the accounting and the activity of your company by identifying in particular the difference between the inflows of money and the outflows. In this sense, the  payment terms  of your customers and the  payment terms  of your suppliers directly affect your cash balance. For example, a late payment to a supplier that is incorrectly negotiated in the contract can cause your  cash flow to be in deficit . Conversely, if your customers’ payment terms are shorter than those granted by your service providers, then you will have all the cards in hand so that your  cash flow is surplus .

Likewise, good  inventory management  is an essential element in ensuring the working capital of the company. In addition to the fact of evaluating the financial situation of the company in real time, cash also and above all allows the entrepreneur to project his activity over time. Depending on the forecast, for example, you will be able to judge more easily the relevance of a  real estate investment  or a financial investment. In other words, the cash flow plan is a powerful ally in reducing the risk of losing money by making bad decisions.

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