3.6.2.1.3
Cash Flow Management
Purpose: Cash flow management involves tracking and managing the farm’s inflows and outflows of cash to ensure that it has enough liquidity to cover its day-to-day operations. Effective cash flow management helps the farm avoid financial crises and maintain operational stability.
Poor Outcome:
The farm has poor cash flow management, leading to periods where it struggles to cover operational costs, resulting in missed payments, delayed projects, and financial stress.
Expected Outcome:
The farm manages cash flow effectively, ensuring that there is enough cash on hand to cover all operational expenses. This results in smoother operations and less financial stress.
Excellent Outcome:
The farm uses advanced cash flow management tools, projecting future cash needs and maintaining healthy reserves. Cash flow is optimized, and the farm operates with financial security and the flexibility to take advantage of new opportunities.