ABSTRACT
This chapter discusses the technical aspects of cash flow management. Effective cash flow management requires careful monitoring, effective planning and forecasting, and judicious day-to-day policies. Most experts agree that effective cash flow management is one of the most important areas of financial management for entrepreneurial ventures. With the tightening of credit for smaller businesses that followed the recession of 2008, cash flow management became an even higher priority for start-up and growing ventures. The entrepreneur should consider both the technical and the emotional side of cash flow management. Several examples show the differences that arise due to the practice of accrual accounting compared with actual cash flow in the business. Long-term negative operating cash flows can be evidence of impending bankruptcy. Cash flow management can cause a great deal of stress for an entrepreneur. The stress of cash flow can challenge the entrepreneur’s relationships with partners, family members, and other business contacts.
