What to Do with a Cash Surplus

 

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Managing and improving your cash flow should result in a cash surplus for your business. A cash surplus is the cash that exceeds the cash required for day-to-day operations. How you handle your cash surplus is just as important as the management of money into and out of your cash flow cycle.

Two of the most common uses of extra cash are:

• paying down your debt
• investing the cash surplus

Like so many other things you do for your business, deciding where to use your cash surplus requires some planning and your better judgment.