Why a Weekly Cash Flow Review Can Save Your Business

A business can be profitable and still run out of cash. Profit is what is left after costs. Cash is what is actually in the bank when the bills are due.

Profit and cash are not the same

You may have sold a lot this month, but if customers have not paid yet, there is no cash to pay salaries and suppliers.

What a weekly cash flow review includes

• Cash received and paid out during the week
• Opening and closing bank balances
• Invoices due from customers and when to chase them
• Bills and salaries coming up in the next few weeks
• A short forecast of the next four to eight weeks

Habits that help

• Invoice promptly and follow up on late payments
• Agree payment terms with suppliers where possible
• Keep a small cash buffer for slow weeks
• Review the numbers at the same time every week

This is why we prepare a weekly cash flow presentation for our clients and walk through it in our weekly meeting, so every decision is made with current numbers.