What is generally a key outcome of effective cash flow management?

A key outcome of effective cash flow management is avoiding insolvency and ensuring liquidity. Proper cash flow management allows a business to track the flow of cash in and out of the organization, which is critical for meeting operational expenses and financial obligations. By maintaining sufficient cash reserves, a business can address immediate needs without falling into debt, ensuring that bills are paid timely and operations can continue without disruption.

This proactive management helps in forecasting cash needs and identifying potential shortfalls before they occur, allowing businesses to make decisions that preserve their financial health. Additionally, strong cash flow management contributes to building credibility with creditors and investors, ultimately fostering long-term sustainability and growth of the business.

Other options may touch on beneficial aspects of business operations, but they do not directly relate to the broad and essential objective of cash flow management, which primarily focuses on maintaining solvency and liquidity.