Rules to secure a good cash flow management

Cash flow is the control of inflow and outflow of finances of an individual or organization.

INFLOW INCLUDE: income, earning, profits, assets.

OUTFLOW INCLUDE: Expenses, payment, liabilities.

Without a proper management of cash flow in a person or a business would suffer financial failure, insolvency, Business breakdown, and lost more.

The Rules On On How To Secure A Good Cash Flow Management Are As Follows:

1. INCOME MUST BE HIGHER THAN EXPENSES

- Let your income be income be higher than your earning, when you earn $100 in a month and your expenses is $101 you are spending more than your earning, which will affect your cash flow management, having your expenses higher than your income could lead to loss, or debt.

2. TARGET ON ACQUIRING INCOME GENERATING ASSETS.

The more income you gets, the more stable your cash flow becomes. Getting more assets help generate earning which would help make a healthy cash flow management. But note that car bought for personal purpose is not an assets, it's expenses for repair, fueling and maintenance comes from the person pocket which lead to increase in the expenses column of the individual, but car bought for business use purpose is an assets because it's help generate more income.