Nothing shapes the health of your company more than cash flow. As the saying goes: 'Profits are an opinion, but cash is a fact'. Never were truer words ever spoken. Is it possible for profitable companies to go out of business? Absolutely. A successful business is a myth without positive cash flow; you cannot pay the rent and utilities, order supplies or inventory or pay employees without the daily cash that makes a business work. Never mind all the complicated and unnecessary reports and analysis; forget the elaborate management scheming that goes on trying to figure out what to do. If you follow the simple rules of "The Business Money Book", you will know the importance of: forecasting accurately (instead of just guessing) your cash flow using flow-of-funds analysis, receipts and disbursement analysis and short- and long-term forecasts; reducing the gap between cash disbursements and cash receipts; implementing a zero-balance account strategy and adopting factoring strategies to eliminate cash flow crunches; using letters of credit as an alternative to cash advances; and, measuring your customer's creditworthiness and setting appropriate credit lines.
Be smart, be savvy, be creative but most of all be liquid. Learn how to keep your company on solid ground by emphasising the basics and ensuring that everyone in your organisation knows that money makes the world go around - or at least keeps the business going and the pay cheques flowing.