Cash flow procedure

There must be planning in the use of cash to know when cash is to be in short supply and when there will be excess. Both situations must be managed for the best results. 2.2 This procedure for controlling cash flow has several advantages: 2.2.1 Provides for the advanced planning of on-hand cash. 2.2.2 Provides for balancing payments with income. 2.2.3 Provides a cohesive plan for paying creditors. 2.2.4 Warns of financial difficulties in advance to take remedial action. 2.2.5 Increases your confidence in your ability to manage cash flow 2.2.6 Demonstrates to both creditors and lenders that management is informed as to the financial requirements of the company. 2.2.7 Provides information to evaluate the impact of purchasing decisions before expenditures are committed. 2.2.8 Facilitates raising additional funds, which are projected to be needed in the future, providing sufficient time to obtain financial support.