Why Worship Cashflow
Its scary the amount of newly formed business or those established but struggling have no idea the amount of money they are making or that the business Cashflow is king. Monitoring Cashflow should be their number one priority and this not just involve looking at the bank statement, or the profit & loss made for the time period.
Common Cashflow problems consist of but not limited to are;
- Difficulty to pay salaries, and employees super, at due dates
- Trade Creditors in Arrears
- Taxation Liability in Arrears
- Just surviving day to day
- Lack of funds for remedial action
- Negative working capital
- Control debtors, and servilely limit the poor paying debtors a certain limit or not allow them any credit.
- Monitor debtors payment patterns, into the bank the quicker the better and the more likely you are able to pay your creditors and other Cashflow needs.
- Recognise there is a problem
- Don’t be over stocked
- Talk to your accountant about getting a qualified bookkeeper involved
- Ask your creditor’s small instalment payments while things are tough it will show that your willing to make a commitment an d more likely give you more stock for resale if needed.