Have you ever heard the phrase TURNOVER IS VANITY, PROFIT IS SANITY, BUT CASH FLOW IS KING?
According to the national statistics (ONS), 80% of businesses fail due to bad cash flow management. Let’s think about that for a second; it’s not due to poor sales or a bad business idea!
I find this heart-breaking that these businesses could have survived if they could have implemented the necessary controls and forecasting.
As an example, invoice financing was costing my client £2400 per month! Now that is a serious dent in the cash flow.
After improving credit control and negotiating better terms with contractors, it took us 16 months to get out of invoice financing, pay all debts to the suppliers and HMRC.
Understanding the sales cycle, knowing the costs, protecting against bad debt, getting paid promptly, and ensuring a management process was implanted. The client could increase profits by 100%, restore confidence from his customers, and goodwill to suppliers.
Cash flow management isn’t just about numbers. It’s the foundation of your business.
Are you surprised that it’s cash flow that closes most small businesses?
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