Cash flow management is the process of monitoring, analyzing, and optimizing the inflow and outflow of cash in a business to ensure there is enough liquidity to meet financial obligations and fuel growth. It involves managing how money comes into and leaves the business over time.

Proper cash flow management ensures that a business can pay its bills on time, avoid liquidity crises, and invest in opportunities for growth. It helps prevent cash shortages and ensures the company’s financial health.

Cash flow forecasting involves estimating future cash inflows and outflows based on historical data and projected sales, expenses, and market conditions. A forecast helps plan for potential cash shortfalls and ensures you have enough cash to cover upcoming costs.

Proper cash flow management allows a business to reinvest profits back into the company, fund expansion projects, hire staff, and improve products or services. Without sufficient cash, growth opportunities may be missed, even if the business is profitable on paper.