Proper cash flow management is closely connected to the budget. By implementing a budget the client now has a documented, reasonable expectation for monthly, quarterly, semi-annual and annual income and expenses. By monitoring cash on a daily, weekly and monthly basis it helps place management in a better position to make important financial decisions such as meeting payroll on time, paying payroll taxes on time, paying bills when due and saving money for capital purchases or other financial goals.

Cash flow management consists of:

• The process of monitoring a company’s cash balance by tracking inflows and outflows of income and expenses
  
  
• At the beginning of each month, if a company can reasonably estimate their end of the month cash balance, this provides them an opportunity to formulate a monthly plan for cash