Cash Flow Management |
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Cash flow management is the process of budget planning and control to ensure short term spending does not jeopardize long term goals.
An individual cannot set his mind on long term goal without having to solve his short term problems. Cash flow issues are short term ones. If a person is facing cash flow problems, then he cannot go on to the life planning. What he has to do is to sit down and really work out a plan to manage it.
Cash flow management is seen as the basic of a successful life planning. Usually it may need to delve deep into individual's spending habits. The basic tool we need to use in cash flow management is the cash flow statement. Cash flow statement provides details of an individual cash movement. With the statement, we can see clearly, the inflows and outflows of cash.
Cash inflows can be derived from earned and unearned sources. For instance, salary or wages, interests, rentals, dividends, gratuities, proceeds from sale of assets or matured endowment policies. Cash outflows comprises of all spending, savings, and investment.
Net cash flow is the difference between the inflows and the outflows. The positions of net cash flow can be divided into 3 categories:
Cash flow management consists of 3 components: Related to Cash Flow ManagementRecent Cash Flow Management Articles:
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