We can help you with the management of your cash flow and liquidity
Companies often experience fluctuations in their funds for both internal reasons (such as investments and strategic changes) and external reasons (such as economic cycles and the payment difficulties of customers). To prepare for and survive such fluctuations, there are two important terms you should know: liquidity and cash flow. But what do liquidity and cash flow mean and how do you manage them?
What is liquidity?
In a nutshell, liquidity means the extent to which a company has cash to meet its short-term liabilities. Liquidity also often refers to a company’s ability to convert its assets to cash. A healthy liquidity reserve is one of the most important prerequisites for business growth. In this article, you will find concrete examples of how you can improve your company’s liquidity.
What is cash flow?
As the name suggests, cash flow is the “flow” of cash into and out of a business. Contrary to liquidity, you cannot reliably determine a company’s ability to pay their liabilities based on their cash flow.