Cash Flow


Brunei has an ever-growing trend of small business start-ups and seasonal vendors who are exploring the world of entrepreneurship. Having taken this first step, not many of these start ups ever see their business dreams become a complete reality. Due to factors such as the lack of courage, competency or good business knowledge they do not invest their money wisely or borrow from credit facilities in order to take their venture to the next level.

What are the key drivers that can help small start ups to succeed? Among other important factors, two of the key drivers that are essential to sustaining a successful business are -:
a sound business plan and a good cash flow projection.

Why is good cash flow management important to business?
Cash flow is to a business what blood is to the human body. Nothing can impact a business more dramatically than not being able to pay your employees at the end of each month; or if you are the sole owner of a business, not seeing any returns for your own cash investment. It is a fact that you need cash to operate and grow your business. Without an adequate cash flow it would be impossible to purchase supplies, pay your rent, advertise, hire employees or take care of the myriad of other business activities.

What are the key things you need to know about cash flow & what are the key pitfalls?
First of all, you need to understand where the money is coming from and going to in your business.

Cash generally comes from sales, collection of account receivables, and the sale of assets. On the other hand, cash flows out to pay all expenses and debt obligations of the business. You would need to know and understand the terms of credit from your suppliers, as this will help you to manage your cash outflow and to extend your cash holdings. Beside this, you also need to be able to manage the receivable terms with your customers and be disciplined about it. A lack of self-discipline in the management of cash out and inflow, will lead to the inability to sustain and expand your business that could eventually lead to unwanted failure.

What are some of the ‘techniques’ you would recommend to best manage cash flow?
You can create a cash flow statement by simply subtracting your cash outflows from your business cash inflows over some given time period, usually carried out on a monthly basis. Cash flow projections should be a part of your budgeting process to ensure that you’re being proactive in managing your business.


At BIBD, our dedicated team at the Tijarah Business Banking provides a dedicated Relationship Manager for your business support. Additionally, we also have a dedicated Contact Centre to assist your business needs anywhere, anytime!

This article was published in the Jul-Sept 2014 issue of Inspire Magazine. Download it here!

hjh nurul2Hjh. Nurul is the Deputy Head of Consumer Banking and the Head of CSR in BIBD. She has worked with BIBD for over 18 years in the areas of Finance and Investment banking. Her current portfolio includes managing the Sales & Distribution Channels of Consumer and Retail Banking. Hjh Nurul holds a BA in Accounting & Finance from the UK and was an IBB scholar.