An SME’s guide to the importance of cash flow management
An article by Barry McCall The lifeblood of almost any business is cash. It matters little if sales are on target if the money isn't coming in from the debtors. Creditors tend not to be charitable institutions and they are generally unimpressed with excuses about difficulties in getting paid by debtors. Insufficient cash coming in on a regular basis leads to problems in paying regular bills such as wages and suppliers. Working capital is absolutely vital to almost every business and the availability of adequate working capital is dependent on strong cash flows. Usually, companies are required to pay their suppliers before they can collect from their debtors, which can quickly exhaust available cash and bank lines of credit. A lack of adequate working-capital facilities can quickly lead to pressure on bank accounts.
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