Small businesses often confuse cash with profit. The two are very different animals, a lack of cash will bring about a company’s demise far quicker than a lack of profit.
A lack of cash in what appears to be an otherwise successful profitable business is usually down to poor cash management. Payment terms offered to suppliers may be very short, to take advantage of discounts, but customers may be very slow to pay, with many having to be chased.
An efficient cash management policy will dramatically increase the efficiency of your business:
– You will reduce time spent chasing payment
– Supplier accounts will not go on stop because you can’t pay on time
– The saved time can be used on other more productive tasks
– Your bank manager will be happier
You will be happier! The stress that comes with the constant battle of chasing cash will recede and you can focus on doing what you do best – developing your business.