Cash Flow Management in Small and Medium Enterprises in Times of Economic Uncertainty

Purpose: The aim of this article is to show the key role of financial liquidity management in the face of economic uncertainty, especially in the context of companies, including SMEs, by presenting practical strategies and tools for risk identification, cost optimization and the use of modern technological solutions to enable enterprises to operate effectively and adapt to changing market conditions. Design/Methodology/Approach: Analysis of the impact of macro- and microeconomic factors, such as the COVID-19 pandemic, Russia's attack on Ukraine or rising inflation, on economic uncertainty and consequences for enterprises, especially in the SME sector. A proposal for a practical approach, focusing on the identification of liquidity risks and the presentation of a range of strategies and tools for financial management in conditions of economic uncertainty. Findings: In an environment of economic uncertainty, businesses, especially SMEs, need to focus on cash flow analysis and identify and respond to risks accordingly, which requires a proactive approach and the use of modern financial management tools. In addition, it is necessary to develop a contingency plan, prioritize expenses, and build stable relationships with suppliers to increase the company's flexibility and resilience to changing market conditions. Practical Implications: Regularly monitor liquidity indicators, such as the current liquidity ratio or the quick liquidity ratio, to quickly identify potential issues and take appropriate corrective action. Creating a flexible action plan that takes into account different crisis scenarios and defines strategies to manage reduced cash flows, alternative sources of revenue, and cost reductions. Consciously determine which of the costs are necessary for the further functioning of the company, and then apply a cost management strategy. At the same time, actively negotiating payment terms and prices with suppliers, striving for long-term cooperation based on trust and mutual benefits, and looking for alternative suppliers. Originality/Value: Specific tips on cash flow management in times of economic uncertainty and contingency strategies that can be used by companies, especially SMEs, in the event of financial difficulties.