Cash flow

Cash planning is one of any managements most important, ongoing duties. The budgeting of incoming and outgoing cash results in the following benefit: 2.1.1 It gives management an early warning of upcoming difficulties with cash availability. 2.1.2 It shows management when a surplus of funds will be available for other than operating use. 2.1.3 It provides a plan for payment to creditors that is balanced with receipts. 2.1.4 It indicates the need to step up collections activity if accounts receivable payments are lagging. 2.1.5 It demonstrates to lenders that management is informed as to the financial requirements and has planned to meet the company's obligations.