An Article by Pete Cooper
The small business webhosting website, iBoost.com, offers a small tutorial about cashflow definition and management. The article is a great little piece about one of the most critical componants of business management.
"If any single term can define what it is that makes or breaks a business, it must surely be 'cash flow'. Even if you have the best staff, greatest investors and wildest ideas, with a bad cash flow situation your business is likely to go bankrupt rather quickly."
"Cash flow is an important topic because it affects all businesses, no matter what industry they're in, their size or even their expertise."
The website suggests a "General Cash Flow Strategy:"
Have a good accountant. Whether you have a large group of accountants working on your books or just your mother preparing the figures to pass on to a lone chartered account, make sure they're good at their job. If your company has more than a couple of employees, having a good accountant should save you more money than the accountant will cost. They will also be more qualified to give you advice on tax loopholes and ways to avoid cash flow problems.
Be diplomatic and don't lie. If you can be diplomatic with your customers and those who you owe money to, you're half way there with solving your cash flow problems. Be honest with people you owe money to. If you can't pay back an installment on a loan within the time required, organize a deal and show them that you're definitely going to have money available to pay the installment at a later date. Most companies will deal with you if you're honest with them. After all, it's not in their interests for you to go bankrupt and be unable to pay off the debt.
Cut down your expenditures anyway. If you can cut down your expenditures just by a little each month, you can save up money to prevent future cash flow problems. Even if you're flush with cash in one month doesn't mean you will be the next. Try not to work on the brink of bankruptcy all the time.
posted by Silentman, Henry C. @ 19:32 hours MT(GMT-7)
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