CATEGORY - Finance

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Cash flow: understand its importance and learn how to implement

All companies seek growth and expansion in the business market, but even the most organized and those that have been in the market for the longest time have already made mistakes or had to learn how an organization's cash flow works.

Following this line of reasoning, today's text will address the importance and impact that good management of this flow can have on a company, showing step by step how to establish one and some advantages of effectively using it.

Many people around the world dream of starting a business, opening their own business, and doing what they love, in addition to seeing their long-term work take shape and size, creating more authority and relevance in the market.

But not all of these people are aware or aware of the tasks, problems, demands, and actions that are necessary to maintain a company. Even those who graduate and understand accounting services admit this difficulty.

Dealing with money is an extremely delicate task that must be very well thought out. Imagine understanding and knowing how to distribute all the money in a company. And the bigger and more influential, the more difficult the task becomes.

For these and other reasons, the use of a cash flow is essential to keep all the company's finances in organized way, in addition to understanding where every penny invested in it is going.

But do you know what a cash flow is and how to implement one in your law firm? The answer to this and many other questions can be found in the following topics.

Cash Flow What is it?

Before delving into the subject, it is important to understand what a cash flow is and what impact it can have on your company's day to-day.

In a simple and very direct way, cash flow is a tool used by your organization that points out details of all the money that comes in and out of it, such as finances and expenses. That is, it is a set of information on where the business's money is.

This encompasses all company expenses, from office chairs purchased for a particular sector to even the company's newest alignment machine. This information directly assists in making your business decisions.

With these management indicators in hand, the company can make decisions and plan for a major acquisition or even save until its debts decrease and it is in a more favorable situation.

With this, we can highlight some data necessary for the financial cash flow to be effective, and your accounting consultancy does not need to look for where each amount was spent, wasting time and money, such as:

  • Balance available daily from the company;

  • Incoming balance;

  • Fixed expenses;

  • Miscellaneous payments.

With this information in mind, it is much simpler to understand the objective and how cash flow can impact your business.

The more control of information your company has, the better it will be at creating and developing strategies that are useful for your day-to-day.

Cash flow how to do?

Now, as important as knowing what a cash flow is and why it is essential for your safety valve plant, knowing how to implement it is equally important. To learn how to do this, check out the following topics.

1 – Get organized first

First, it is necessary to organize the house and understand how your balance is currently. To do this, move your finances and understand how much the company earns and spends at the moment, that is, check your opening balance.

After that, set a time for the entries to be made, both debts and payments, thus making you have an average of earnings and expenses. This time can be monthly, quarterly, or even semi-annual, depending on your need.

2 – Know your debts and payments

Now that you understand the importance of cash flow, it is important to understand where the money is going and divide it into categories to make it easier to organize and make it much simpler to, for example, invest in a new autotransformer for your company.

Knowing when each expense is due when payments fall, whether it is fixed, variable or quarterly, is part of your task at this point in the process, then helping to organize all your monthly cash flow and making it more effective.

3 – Take control of everything

In the period stipulated to carry out the cash flow, it is important to record any and all amounts that enter or leave your company's account. This will give you a lot of information regarding the average amount your business spends and earns during that time.

Also, record the receipt forecast and expense forecast; this helps your company prepare for possible amounts that may come out of your account throughout the quarter, such as the purchase of a new level sensor.

Everything that enters and leaves your company has some impact, and in the future, depending on the value of the exit or inflow of capital, it will or may not be possible to make an investment for your business.

However, it is not a simple task for your finance department, but the others must also be aware and be reeducated to have this type of attitude, helping the company to obtain this information in the most assertive way possible in the daily cash flow.

4 – Use technology to your advantage

Technology is there for everyone and should be used for your company's benefit, so look for a system that unifies all these values ​​and updates whenever any changes are made, making it easier to make purchase decisions for a new flow counter, for example.

There are several systems that integrate these values, it is only necessary to research the one that best suits your business strategy. Like, as an example, a cash flow spreadsheet.

Author: admin

Date: Sep 05 2022

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How important is a financial schedule for a company?

In the year 2021, we experienced a delicate moment, where many people lost their jobs, and many companies had to close their doors because of the pandemic situation caused by the coronavirus. Although the measure was necessary for people not to be contaminated with the virus, the act of closing the doors of companies caused many to end up financially destabilized.

Nowadays, however, although the situation has not yet returned 100% to normal, many companies are already reopening, and many people are already managing to position themselves in the job market. However, given all the past events, most companies choose to make a financial schedule first. 

In addition to helping business owners make better business decisions, financial plans have a number of other benefits for the company at large, in addition to ensuring that investment strategies are effective.

So, for you to understand a little more about the subject, we have separated the main related topics here in this article, so read on and stay inside. 

What is a company's financial schedule?

At first, so that we can understand the importance of the financial schedule, it is interesting to highlight what this term consists of, and what are the main ways to develop a financial schedule in a company so that it can reach increasingly higher levels of recognition. 

The financial schedule, in fact, is nothing more than planning, a term widely used in several subjects, in addition, a term that must be taken into account in different branches, after all, when planning a trip, for example, it is necessary that a plan is made with the route and the values ​​so that the final destination can be reached. 

Although the example was a little distant, in the case of a company, the financial schedule, that is, the financial planning works in the same way, so, before the company reaches the final destination, which would be a success, it is necessary that the steps are organized to be performed in the best possible way. 

How important is the financial schedule?

As we mentioned above, the main importance of the financial schedule is related to the issue of the company being successful throughout its journey. However, in addition to this issue, there are some other importance that we can mention when we think about the financial schedule in a company.

The first of these important is related to the issue of being prepared for a crisis, or even for a pandemic, which happened in the year 2020. As we mentioned, many companies had to close their doors, even because of a preventive measures so that other people would not be contaminated with the virus. However, if the company had a properly developed financial schedule, they could have worked to make the company work only in online format, for example. So, by adopting a financial schedule, you will be able to ensure that your company survives even in the midst of an unforeseen. 

Another factor that directly reflects on the issue of the company having a financial schedule is the accounts. This is because, just as it works in our house, for example, the company also needs to deal with the issue of electricity, energy, water, and mortgage bills, for example, which are not cheap, especially considering that there are companies with more than 500 contracted employees. In addition, the company has to pay the salary of all employees without delay, as well as the settlements in case the employee is fired, and several other taxes that workers are entitled to. 

Thirdly, another importance that can be highlighted when we think about a company's financial schedule is in relation to labor. This is because, when we think of a beverage factory, for example, it is essential that the company can bear all the costs necessary for the production process, as well as having to bear the expenses related to transport so that the raw material reaches the company and then production starts. 

In addition to all these points mentioned above, having a well-developed financial schedule, the greater the chances of the company to start investing and, with that, to present high growth, both in terms of employees and in terms of recognition. and sales. Also, the more recognized your company is, the more people will crave a position.

Author: admin

Date: Sep 05 2022

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The day to day of a financial manager is full of surprises and challenges because dealing with the financial part is not an easy task. Understand in this article what are the 10 challenges that a financial manager faces in his daily life. Good reading!

What does a financial manager do?

The financial manager is responsible for all the administration of the financial part of a company. In this way, the financial manager has an analytical and strategic vision, adding a lot of value to the company.

In the same way, he is a professional with a wide field of activity, from financial departments, banks, stockbrokers, or even acting as a self-employed person. In companies, he can occupy various positions as an assistant, analyst, consultant, or financial market advisor.

After all, the financial manager has a very busy routine, as he follows all the financial fluctuations of the company and the market.

10 challenges of the financial manager

First of all, every financial manager must be prepared to face the challenges of financial management. For this, it is not enough to have only specific knowledge in the financial area.

Thus, a financial manager must have knowledge in financial mathematics, accounting, administration, and even human resources.

Therefore, he needs to have an overview of the company with the aim of creating internal controls that will be used to analyze and predict future difficulties.

Thus, I will mention here 10 activities carried out by the financial manager that is real challenges:

  • tax management

  • Sales price formation

  • Audits

  • Accounts Payable Management

  • Accounts receivable management

  • investments,

  • balance control

  • Cash flow management

  • Analysis of financial statements

  • People management

tax management

First, having knowledge about the types of taxation is essential to identify which taxes will be levied on operations. It is through her that he will work out legal ways to pay fewer taxes.

In this sense, to achieve this, the financial manager must carry out several analyses, verify if he can avoid certain operations and look for alternatives more in accounts.

Thus, tax management is an activity that requires a lot of dedication and study on the part of the financial manager.

Sales Price Formation

Another important activity is the study to establish the selling price of products or services. After all, it is through it that the financial manager transfers the costs and expenses, the tax burden and the desired profit to the final price of the product.

Needless to say how important this study is, right?

After all, companies that decide to sell their products at market price without checking operating costs, fixed expenses, taxes, and desirable profit, may have a big loss.


First of all, carrying out audits in the departments that are supervised by the financial manager is extremely important to verify compliance with the processes that have been defined.

In this way, the analysis of reports and important data is carried out in the audit in order to significantly reduce problems and errors in the financial flow.

How do audits work?

Let's use the example below to understand how it works.

The purchasing department is under the supervision of the financial manager, and this department cannot exceed $10,000.00 in purchases in the month of June/2021. So, the function of the audit in this example is to verify if the purchasing sector was able to respect the authorized budget limit for the month of June/2021 or if there was any unforeseen event that caused the sector to exceed the  budget.

Therefore, the audit findings on the procurement process will indicate where the process should be changed or improved to adapt to the company's needs, in order to identify whether internal controls are working as expected.

Accounts Payable Management

First, for a company to have credibility in the market, it is important that it fulfills the commitments made with its suppliers and pays its debts on time.

In addition, accounts payable management controls and analyzes all financial obligations assumed by the company, that is, any type of payment, whether from its suppliers, employees, purchase of raw materials or others.

Therefore, if you have a department within the finance department that deserves special attention, it is the accounts payable department. After all, that is where the programming and finalization of the payments that have been agreed take place.

Accounts Receivable Management

First of all, since we talked about the outflows of values ​​in the management of accounts payable, it's time to talk about the entries of values ​​that is the management of accounts receivable! The accounts receivable department is responsible for managing and tracking the company's receivables.

Above all, competent management of accounts receivable can point out the need for new policies for granting credit to customers, the need for negotiations and possibilities for raising funds, as well as verifying that the deadlines for receipts are meeting the needs of the company.

Therefore, the management of accounts receivable is extremely important in the administration of any company, it is through it that the company can leverage the balance of accounts receivable.


Beforehand, the control of financial investments is an important item that must be managed by the financial manager. If the company generates profit, it is necessary to apply a certain amount to guarantee a greater financial return, right?

In this sense, it is necessary that the financial manager seeks the best investment rates in the market and knows how to identify the periods in which the value must be applied according to the company's cash flow needs. Likewise, investments should be sought that are available in solid and reliable institutions.

Finally, it is important to emphasize that when the company has available resources, it is great that they are applied; however, these resources must be very well applied by the financial manager so that there are no losses.

Control of Bank Balances

Primarily, having tight control of bank balances is a basic task for any financial manager. In this sense, companies that do not have this control run the risk of using short-term resources and paying very high-interest rates.

However, the control of bank balances must be carried out daily through bank reconciliation, which will cross the information from bank statements with the financial information.

Therefore, from there, the financial manager can make the right decisions about the use of available resources.

Cash flow management

First of all, if the financial manager manages his cash flow well, he will have a great way to control the inflows and outflows of resources. In this sense, it is through cash flow management that he will visualize all the values ​​that will enter and leave the cash in a certain period.

In this way, it is possible to identify when the balance will be negative, making it possible to go after resources so that the balance is positive on that date.

Lastly, this analysis must be done for positive balances that will not be used in the short term, so that the company does not have money stopped.

Analysis of Financial Statements

In advance, the analysis of financial statements is an essential task of the financial manager. It is through it that he presents the indebtedness, profitability, profitability ratios, and many others.

Together with the information at hand, the financial manager can interpret and assist the company in decision-making. That is, it is at this time that the financial manager says where the company had good results and where it did not, pointing out improvements.

In conclusion, the analysis of financial statements is essential for the vision of the financial health of any company.

People management

At first, glance, if you think that by dealing with numbers, the financial manager does not need to learn to manage people. You are very wrong!

Often, financial managers need to deal with people. After all, only they can achieve the defined objectives.

In this way, managing people is an art for the few, and those who succeed become true leaders. Perhaps this is the biggest challenge for the financial manager and for any management.

Author: admin

Date: Sep 05 2022

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