What is the biggest benefit of cash flow management?

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The biggest benefit of cash flow management is that it provides confidence for business owners and management that the business is sustainable.  Many people believe that if they just sell enough… cash flow will take care of itself.  This is a dangerous myth!  Cash is required to fund sales i.e. to pay for products to sell before you’ve been paid by customers and to pay for expenses such as wages, rents etc.  If it’s the case that you need cash to fund sales… the more sales you make, the more cash you need.  If this isn’t taken into consideration when a business begins to grow, cash flow squeeze is the result.  Growth can actually be the cash flow downfall of a profitable business!