Robert Trosten shares useful tips for effective cash flow management in business


Cash flow is an essential ingredient of your business! When you have a healthy cash-flow, you can pay all business debts in time, expand the business when necessary, and sustain operations. If there isn’t a proper cash flow, you will face financial ruin. Cash flow management comprises a set of practices that help you track, assess, and enhance your business finances. Cash flow management’s objective is to enable positive cash flow, where you have more money than going out. 

In business, cash is the king! Managing your financials is essential if you want to keep your business afloat. However, it is also necessary if you’re going to expand and grow your brand. It will also help to plan and predict the cash surpluses and shortages. 

Robert Trosten shares tips for cash flow management

There are two strategies for enhancing the cash flow: reducing the outgoing money and increasing the incoming cash. When business owners encounter financial issues, use a credit card, or open a line of credit. That is not a good idea. Robert Trosten shares some of the best guidelines for cash flow management. 


  • Know what you need to break even


Before you can work for a positive cash flow, you should know the amount you need to earn for breaking even. When you go beyond the break-even point, you are doing something correctly. And when you fall short of it, there must be an issue that you need to address and solve. 


  • Keep an emergency cash reserve


Every person should have an emergency fund. Similarly, businesses should keep an emergency cash reserve. It will enable you some security and flexibility when there are economic downswings. It is an excellent practice to have over six months of expenses. 


  • Create invoice terms and timelines


It is necessary to create clear payment terms before you start working with a new supplier or client. Ensure to lay out when the invoice payments get expected. It could be instantly after submitting the invoice or within a span of 15 or 60 days. If it’s a resource-heavy project, it is good to ask for an initial deposit that will help you cover the required costs. You can ask for the remaining payment on attaining specific deliverables and milestones. 


  • Encourage early and easy payments


An IOU (I Owe You) from the client is equivalent to not having money! You need to motivate your customers to pay you early, which will financially benefit you. You can provide small discounts and deals if they pay early. 


  • Give importance to cash flow than profit


Most people believe that the secret to business success is profit. The truth is, it’s all about the way you manage cash flow. You must check the earnings against the break-even point. If you are earning more cash than that and still the money feels tight, there are problems with accounts payable, receivable, or the shortfalls. 

These are some of the crucial ways in which businesses can manage their cash flow cycle. 

About Author

LaDonna Dennis

LaDonna Dennis is the founder and creator of Mom Blog Society. She wears many hats. She is a Homemaker*Blogger*Crafter*Reader*Pinner*Friend*Animal Lover* Former writer of Frost Illustrated and, Cancer...SURVIVOR! LaDonna is happily married to the love of her life, the mother of 3 grown children and "Grams" to 3 grandchildren. She adores animals and has four furbabies: Makia ( a German Shepherd, whose mission in life is to be her attached to her hip) and Hachie, (an OCD Alaskan Malamute, and Akia (An Alaskan Malamute) who is just sweet as can be. And Sassy, a four-month-old German Shepherd who has quickly stolen her heart and become the most precious fur baby of all times. Aside from the humans in her life, LaDonna's fur babies are her world.

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3 years ago

Thank you for these tips, in fact I am waiting for new ideas from him to launch his career to a new level. Also, I read about and I want to see how this startup can launch this old magazine and make it the best

3 years ago

Thank you for your recommendations. Now you can also learn management skills by watching successful leaders or companies. For example, Maven Sports Illustrated, which received a good CEO

Denial Well
Denial Well
3 years ago

Thanks for your advice, I am now considering growth hacking in Singapore as an alternative and a good solution for my business growth. I think that a good specialist can tell me where to direct my business

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these tips are well amazing to read and overall best define. Thanks for share.