18th-Jan-2026 • Isaac Kennedy • SME Cash Flow Management
For Kenyan small and medium enterprises (SMEs), cash flow management is a critical yet often overlooked aspect of running a successful business. Adequate cash flow ensures smooth operations, while a shortage can lead to financial difficulties or even business closure. Here's how you can effectively manage your SME's cash flow:
Knowing the timing of when money comes in and goes out is essential for managing your cash flow. Identify key periods where cash inflows may be lower (e.g., after delivering products or services but before receiving payments) and plan accordingly.
Anticipate future expenses, such as inventory purchases, employee salaries, and loan repayments. By forecasting these costs, you can prepare for any cash shortages and make adjustments when necessary.
Regularly review your financial statements to understand your business's current financial health. Key indicators include profit margin, account receivable days, and account payable days. By keeping a close eye on these metrics, you can identify potential cash flow issues early.
Offer multiple payment methods to make it easy for customers to pay. This could include cash, mobile money, credit cards, or online banking. By diversifying your payment methods, you can improve cash flow and reduce the risk of cash shortages.
Business management platforms like Lipabiz Technologies Ltd provide tools to help manage cash flow more effectively. Features may include invoicing, expense tracking, and payment processing. By automating these tasks, you can save time and improve the accuracy of your cash flow projections.