Cash flow management

The objective of preparing a cash flow projection is to determine deficiencies or excesses in cash from that which is necessary to operate the business during the time for which the projection is prepared. If deficiencies are revealed in the cash flow, financial plans must be altered to increase cash by injecting more equity or capital through: getting a loan, increasing sales, or reducing expenditures. In cases where excess cash is revealed, it might indicate excessive borrowing or idle money that could be put to work. The objective of cash management is to implement a plan which will provide a well-managed flow of cash.