Cash management and liquidity strategies for business operations

Effective cash management remains a critical challenge for businesses, even as digital payment systems expand. In Ecuador, the Central Bank reported that cash preference closed 2025 at 59.9%, highlighting the ongoing need for businesses to implement orderly processes for recording, verifying, and reconciling physical currency from the point of sale to final closure.

Beyond physical handling, maintaining liquidity through disciplined cash flow forecasting is essential for business survival. Distinguishing between accounting profit and actual available cash helps prevent situations where a profitable company cannot meet its immediate obligations, such as payroll, rent, or taxes. Key factors influencing liquidity include accounts receivable, inventory management, and the timing of payments to suppliers. Experts recommend regular weekly reviews of cash movements and negotiating clear terms with clients and vendors to bridge potential gaps between income and expenses.