The Lifeblood of your business
Understanding cash flow is the key to business success. Cash is the lifeblood of a business and a business needs to generate enough cash from its activities so that it can meet its expenses and have enough left over to repay investors and grow the business. While a company can fudge its earnings, its cash flow provides an idea about its real health.
Without generating adequate cash to meet its needs, a business will find it difficult to conduct routine activities such as paying suppliers, buying materials, and paying its employees, let alone making investments.
Small businesses stand a better chance of surviving critical business junctures when they know what cash they should have coming in and going out. This requires having a reliable cash flow forecast for predicting future monthly expenditures while keeping track of cash on hand. With the right cash management tools in place, small businesses can have the advantage of speed and agility in reacting to changing circumstances.
As a business owner, your job is to keep the flow going without disruption, which means knowing your current cash position.
Do you know your business cash position? What do you need to do to take control of your cash flow?
For more information about how I can help your business visit www.andreamoody.com.au