Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Forecast first
The foundation is a rolling cash-flow forecast — a simple projection of expected inflows and outflows over the coming weeks/months, so you see a squeeze before it happens. This is different from profit: a profitable business can still run out of cash if timing is wrong.
The levers
Then pull the levers: speed up receivables (invoice immediately, set clear credit terms, follow up systematically, take advances); manage payables sensibly (use terms, don’t pay early without reason); control inventory (cash tied up in stock); and keep a cash buffer for shocks. Review the forecast vs actuals regularly and adjust. Match financing to need — don’t fund long-term assets with short-term cash.
A worked example
Example: a business with growing sales hits a cash crunch because customers pay in 90 days while it pays suppliers in 30. A 13-week forecast reveals the gap; it then shortens credit terms, chases overdue invoices, and arranges a working-capital line for the timing difference — smoothing the cash curve. That’s active cash management, a core Virtual CFO task. Our team can build your cash-flow forecast and discipline.