How to Manage Cash Flow

Written by Debtbook Team | Jul 30, 2025 1:14:02 PM

Key Steps to Manage Cash Flow Effectively

Monitor Cash Inflows and Outflows Regularly
Track all incoming revenue and outgoing payments, ideally on a daily or weekly basis. This includes grants, reimbursements, tuition, taxes, payroll, vendor payments, and debt service.
Build a Cash Flow Forecast
Create a short-term forecast (like a 13-week cash flow forecast) to predict periods of surplus or shortfall and plan accordingly.
Maintain a Cash Buffer
Set aside reserves to cover unexpected costs, delayed funding, or emergency needs.
Prioritize Spending
Pay critical obligations like payroll and debt service first, and defer discretionary spending when cash is tight.
Improve Receivables Management
Speed up the collection of receivables by tightening billing processes and following up promptly on overdue accounts.
Review Payables Strategy
Take advantage of early payment discounts when possible, but don’t pay bills sooner than necessary if it could create a cash crunch.
Use Technology to Improve Visibility
Use treasury software tools to automate reporting, consolidate bank data, and track real-time cash positions across multiple accounts.

What’s important here?

Managing cash flow is about more than just paying the bills–it’s about ensuring your organization has the visibility and control needed to operate with confidence. When you track cash activity, forecast future needs, and make strategic decisions around timing and priorities, you can stay one step ahead of potential issues. Strong cash flow management supports mission success, financial health, and long-term resilience.

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