Optimizing cash flow is to know what your Cash on Hand Balance should be on a monthly basis. (This “key figure” comes from your Balance Sheet.)
To demonstrate, if your Ending Cash On Hand Balance for February was $30,000 and your monthly payroll is $50,000, are you struggling to make payroll each month and pay your vendor bills? If so, that is not enough Cash On Hand on a monthly basis. One of the secrets to optimizing cash flow is to have enough Cash On Hand each month to handle the ebbs and flows of the monthly cycles of your business Revenues and Cash Outlay.