Everybody likes to tell business owners that it’s critical to manage your cash flow.

But what the heck does that mean? That’s like saying it’s critical to manage your water flow. Or your blood flow.

A better way of phrasing it is to say: It’s critical to manage the things that drive your cash flow. For most small businesses, that primarily consists of four things:

1. Your bank account

2. Your credit card balance

3. Your accounts receivable (especially with your biggest customers)

4. Your accounts payable (especially with your key vendors)

In other words, managing cash flow boils down to monitoring those four things day in and day out and then taking action as needed. The overall goal is to make sure your business has enough cash to cover anticipated expenses and continue operating smoothly.

If you don’t have enough cash to cover upcoming expenses (vendor bills, payroll, rent, whatever), then it’s time to roll up your sleeves and get to work. Review your A/R and start chasing overdue invoices and late-paying customers. Look at your A/P and decide if you can delay paying a few bills for a while (but don’t do that with key vendors, they should always be paid on time). Use your credit card balances strategically and learn how to “work the float.”

Every successful business does these types of things. Why? Because managing cash flow is a constant juggling act, and it’s all about timing.