What is considered a good cash flow? And what are the characteristics of a strong statement of cash flows? These are questions many South African small business owners ask when they first start preparing cash flow statements.
While you might already be reviewing your cash flow statement each month, there are several key factors to pay extra attention to. For example, are you generating enough positive cash flow? Or is it time to tweak your business strategies? For a small to medium-sized business or a startup, this is doubly important as you’ll feel the effects of a poor cash flow sooner. This also means tweaking a poor or inefficient process is much more feasible.
Here are three important factors that determine the health of your cash flow.