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Whatever system you use to update your cash flow should be easily accessible and able to be used frequently. This gives the most up to date picture.

Cash Flow Q&A: "How often should I review and update my cash flow?"

How often should I review and update my cash flow?

Transcript:Hi there. I'm Blaine with Dryrun.One of the questions I'm asked quite frequently is how often should I update and review my cash flow?Well it's really two things going on there. The first is how often you need to update your cash flow. It's really important that you are updating your projections every time something happens in your business that affects your cash flow.So if you are sending out an invoice make sure you are updating your projections right when you send out that invoice. And as new information comes into your business, let's say you find out that you are going to get a check in a little bit late. You need to update your projections to reflect that.So make sure that whatever system you have set up for your cash flow, that it is convenient to pop in and make a quick change, quick update, whatever you need to do to make sure you always have a really clear picture of your cash flow projections moving forward.Now the second part of the question is how often should you review your cash flow? Well I would recommend that you review your cash flow a minimum of once a week.Now it's really important that when you are looking at those numbers that you are looking at the actual date the cash will come in to your bank account. Or when your cash is leaving your bank account.For instance if you send out an invoice and you are updating your cash flow projections, make sure you add in the date you expect the cash to come in to your account. So let's say you invoice and it's net 30 well put in 30 days after the invoice is sent. But if it's a customer that chronically pays late and you know it is likely to show up 45 days after you invoice it, that's the date you put in your cash flow. 45 days after the date you've invoiced it. And that means your forecasts are going to be a lot more concrete, a lot more accurate.And finally, once a month make sure you take a little more in depth look at your cash flow. This is a time you may want to get your colleges together, your partners and even if you have been updating it weekly, this is a time to sit down and look at your overall financial position. Take a more in depth look at your cash flow projections for the next 2, 3, 4 months so that everybody is on the same page and understands what needs to be done to make sure your cash flow is healthy.Now if you found this useful please feel free to comment below and let me know how you handle your cash flow and share some tips that others might use as well.

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