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A Guide to Cash Flow Management for Online Businesses

Cash flow management refers to the planning and tracking surrounding the money coming in and out of your business. The majority of your business's success will rely on your cash flow and how you deal with it. In this article, we have created a basic guide for you to follow to manage your cash flow.

1. Create a Plan

Planning is an essential part of cash flow management because you need a plan to avoid unexpected outflows. If you are starting a new business, you should plan for the first three months of daily expenses so that you know exactly how much money you need to spend each month to keep your company afloat.

Another important thing to plan for is your financing. You need to estimate the amount of working capital that you'll need to run your business. If you do not have the working capital, you can either pay with assets or apply for a loan.

2. Understand Your Cash Requirements

Your business's cash requirements are any expenses that you need to pay immediately. This includes your payroll, rent and loan payments. Ideally, you should pay these expenses on time and not allow them to become past due or delinquent.

3. Know Your Current Cash Position

A key aspect of managing cash flow is knowing exactly how much money you have at your disposal at any given time. If you do not know exactly how much money you have, you will not know when you will run out of money. You should always have enough money on hand to cover upcoming expenses.

Remember, your business will always have expenses that are more important than other expenses. For example, if you have to choose between paying a contractor or your payroll, you will pay your payroll first.

4. Follow Up on Receivables

Make sure you follow up on any outstanding receivables that you have. If you can, you should send out invoices immediately after completing a job. If you cannot send out invoices immediately, then you should invoice at the end of the month. This way, if you have any outstanding receivables, you can send follow-up invoices requesting the outstanding payments.

5. Always Have Enough Cash to Cover Payables

Another key aspect of cash flow management is to always have enough money to pay any bills that are due. For example, you should have enough money to pay your utility bills that are due on the first of the month.

This is important because if you do not pay your bills on time, you might receive a bad credit rating. If you have the funds to pay your bills, you should pay them in full.

6. Review Your Financial History

It is also very important to keep track of your financial history. This will allow you to know exactly what your business does or does not have in the bank at any given time. You can review your financial history by creating a chart of your income and expenses over a certain period of time.


Cash flow management can be difficult to master and may require a lot of work. However, knowing how to manage cash flow is essential to keeping your business running at a profit. The more you learn about managing cash flow, the more successful your business will be.

If you run an online business, you will need an eCommerce business advisor, and The ECommerce Accountant has that for you. We offer bookkeeping, accounting and advising services. Contact us today to get started.

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