5 Important Cash Flow Metrics

Eyes on Cash Flow

Monitoring cash flow is crucial for the success of any business. By keeping a close eye on the money coming in and going out, business owners can make informed decisions about spending, investments, and overall financial health. Without proper monitoring, a business may find itself struggling to pay bills, missing out on growth opportunities, or even facing potential bankruptcy. Understanding cash flow allows businesses to plan for the future, manage expenses effectively, and ensure long-term sustainability. In short, monitoring cash flow is a vital aspect of running a successful and profitable business.

Here are 5 metrics to keep an eye on:

1. Low Cash Balance:

When your cash balance falls below a certain threshold, it's time to cut expenses, collect receivables, or secure additional funding. You can set up an alert in WeOS to notify you when your cash or account balance goes below a certain threshold. 

Eg: "Let me know when my cash on hand falls below $7,500"

2. Large Transaction:

Set an alert for any transactions above a specified amount, both for cash inflows and outflows, to immediately notice significant movements in your cash balance.

Eg: "Notify me of any cash inflows or outflows transactions above $50k in a single day"

3. Daily Cash Position:

Get a daily alert summarizing your opening and closing cash balance to keep a constant pulse on your cash flow.

Eg: "Tell me what my bank account balances are every Monday, Wednesday and Friday "

4. Accounts Receivable Aging:

Receive alerts for invoices that are approaching or have surpassed their due dates, highlighting potential issues in cash collection.

Eg: "Alert me every time an unpaid invoice goes over 2 months"

5. Accounts Payable Due:

Set up reminders for upcoming bills and payments due to manage your outflows and avoid late payment penalties.

In conclusion, monitoring business cash flow is not just a task for accountants or financial analysts; it is a critical aspect of ensuring the overall success and sustainability of any business. With the help of tools like WeOS, businesses can set up alerts for low cash balances, large transactions, daily cash positions, ageing accounts receivable, and upcoming accounts payable. By keeping a close eye on these key metrics, businesses can navigate financial challenges, seize growth opportunities, and ultimately thrive in the competitive business landscape. So, why bother monitoring cash flow? Because the financial health of your business depends on it.