Cash is king when it comes to the financial management of a growing company. The lag between the time you have to pay your suppliers and employees and the time you collect from your customers is the problem, and the solution is cash flow management.
- An accurate cash flow projection can alert you to trouble well before it strikes.
- If you got paid for sales the instant you made them, you would never have a cash flow problem. Unfortunately, that doesn't happen, but you can still improve your cash flow by managing your receivables.
- Top-line sales growth can conceal a lot of problems-sometimes too well. When you are managing a growing company, you have to watch expenses carefully.
- Sooner or later, you will foresee or find yourself in a situation where you lack the cash to pay your bills. This doesn't mean you're a failure as a businessperson-you're a normal entrepreneur who can't perfectly predict the future. And there are normal, everyday business practices that can help you manage the shortfall.
Via Ashok Ramachandran