Cash flow management can simply be defined as the process of tracking the sum of money that is going out or coming into a business organization. This flow ideally helps business organizations to predict how much money would be available to it in the future. Arnon Dror linkedin additionally highlights howcash flow management can be integral inidentifying the amount of money needed by a business so as to cover its diverse debts, such as paying the vendors, suppliers and staff. Arnono Dror essentially is an experienced industry professional who has a good knowledge of cash flow management, as well as various other elements relating to finance.
Arnon Dror holds the reputation of being a successful champion of diverse types of impactful operational improvements across multiple organizations belonging to distinguished sectors of the world. According to Arnon Dror linkedin, he has been responsible for delivering outstanding improvements when it comes to cost savings, customer satisfaction, margins, as well as freeing cash flow. As per Arnon Dror, the term cash flow is majorly used to describe the changes in how much money a business has from one point to another. Cash flow management subsequently focuses on keeping track of this flow, while also analyzing its changes. This system goes a long way in enabling organizations to spot trends, prepare for the coming days, as well as tackle any kind of problems that they might have with the cash flow. Efficient cash flow management is imperative to make sure that a business organization has adequate sum of money that would be necessary to keep the organization up and running. In Arnon Dror video, some of the aspects those are required to be considered when analyzing cash flow changes have been mentioned. Here are some of those areas:
- Seasonality of sales: There are a large number of organizations operating in the world whose income streams are connected with the seasons. Hence, their cash flow management plan should be designed while taking into consideration the months of the year where their income would be the leanest. This factor is also quite true for businesses that run on contracts.
- Cash inflow: This element underlines how quickly and efficiently a business organization is able to convert their sales into cash.
- Cash outflow: Having a good idea about when the cash of a business is leaving is equally important as been aware about when it comes in. This factor enables organizations to identify areas that can be a concern from a cash flow perspective.
- Cash control: This element largely involves the understanding of how to use the cash available in the most efficient manner possible. The accounting staff of an organization would ideally see to the among of cash that is being tied up in stock or are work-in-progress, and they also might have to take care of the procedures for collecting outstanding customer debt.
A cash flow health check of a business is necessary from time to time to make sure that it runs in a smooth fashion for a long period of time.