8 Essentials and Taboos for Optimising Cash Flow Management:- www.deekpay.com

In business operations, while companies are focused on revenue targets, the recovery of monies and their effective utilisation is essential to ensure that the business has robust liquidity.

With digitalisation, cash payments have been replaced to some extent. However, the volume of cash in circulation continues to grow. Therefore, companies should have a clear cash flow management plan and utilise online payment systems.

**Highlights (how to optimise cash flow management)**

Here are some steps to improve your cash flow management:

Make a plan and stick to it

Study the cash flow and identify patterns to help design a cash flow plan, i.e. when and how much cash flows in and out. Once developed, it should be adhered to - from sales orders to customer payment recovery, and from purchase orders to payment.

Setting up a financial calendar

Having a financial calendar helps with cash flow planning. Payments can be scheduled and accrual reminders can be sent on time. Subscriptions, monthly fees and bills can also be scheduled to avoid facing late fees unnecessarily.

Use of science and technology

The use of technology can help you avoid common risks in cash flow management. Accounting software can improve your cash flow management in terms of record keeping and other operational assistance. Additionally, you may choose to use PayU Priority Settlement Services to manage your cash flow. By integrating PayU Priority Settlement Services, you will gain greater control over your cash flow, automated reconciliation features, and flexible and immediate payment settlements.

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Following the financial calendar but not following up on payments can lead to defaults and cash flow delays. And it's not just payment recovery that requires follow-up. You can also use payment systems to guide customers through payment terms, due dates, and more.

**Taboos (things to avoid in cash flow management)**

Here are some things to avoid for better cash flow management:

Untimely invoicing

Customers typically pay invoices in accordance with credit terms. Delays in issuing invoices may result in delays in the release of payments, thereby disrupting cash flow.

No contingency fund

Unforeseen circumstances may occur at any time and from time to time businesses may experience periods of lull. A portion of business receipts should be set aside as a contingency fund to ensure that cash or bank payments can be made even when business is slow.

No commissioning

Well-run organisations always deploy dedicated staff in key positions. Delegation within the organisation ensures that each sub-process works smoothly and in tandem across a wide range of operational, investment and financial activities (e.g. invoicing, customer communications, recoveries, liquidity investments, processing of payment orders, etc.).

Failure to communicate

Various functions within the enterprise should maintain ongoing communication regarding the cash flow position. Delays in expected collections, cash constraints that may affect disbursements from operations, and budget versus actual comparisons are all matters that should be discussed and communicated between relevant stakeholders to avoid misunderstandings or delays.

While you follow the above advice to better manage your cash flow, there is another way to manage it easily without having to face daily cash crunches. Yes, keep cash flow flowing and accelerate growth every step of the way with PayU Priority Settlement Services.

Explore PayU Priority Settlement Services

**Conclusion**

In today's digital age, payment and settlement systems offer simplified cash flow management for SMEs and even large e-commerce marketplaces. In addition, PayU further enriches your options for accepting payments with intelligent checkout solutions and code-free solutions. Similarly, PayU simplifies payment distribution through automated customer, vendor and aggregator payment solutions. Thus, when it comes to payment services and other cash flow management solutions, an association with PayU can make your business operations and cash flow hassle-free for your customers and team.

Extended reading: how to boost your cash flow

FAQ: When does a business have negative cash flow? Cash flow can become negative due to expenses exceeding income (due to credit abuse, bad debt, poor cash flow management, etc.). Are net income and cash flow the same? No. Net income is the total income after expenses for a given period. Cash flow is the change in cash balance between two accounting periods.