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S9 E22 Essential Tips on understanding Cash Flow With Raj Kapur
E22 Essential Tips on understanding Cash Flow
Cash flow analysis is particularly important for startup businesses or businesses undergoing rapid expansion, where increasing capital expenditures, higher labor costs, purchases of new equipment, and increased inventory require large cash outflows. At the same time, sales are in a growth phase, and cash inflows tend to lag.
A cash flow analysis of your accounts receivables will show you which customers are slow payers. Working with small businesses and having started many businesses, I know that one of the main reasons businesses fold is not having enough cash or not managing the cash flow well. See, the sad truth is that cash-flow surprises kill many startups. Overall, 90 percent of small business failures stem from this.
So what should you do?
Good cash-flow management, in simple terms, means understanding every inflow and outflow of cash and not putting this function out.
Understand and record cash flow projections
Profit does not necessarily equate to cash
Unanticipated expenses and emergencies
Marketing Expenses exceed sales
Late payments can cause major cash flow disruptions
Faster Growth in the company than anticipated
Tags:statement of cash flows,understanding cash flow,understanding accounting,cash flows operating activities,cash flows,indirect cash flow statement,cash flow statement operating activities,cash flow statement analysis
Connect with Raj, visit www.RajKapur.com
Email: [email protected]
Book a FREE Call www.rajkapur.com/freecall/
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By Raj KapurE22 Essential Tips on understanding Cash Flow
Cash flow analysis is particularly important for startup businesses or businesses undergoing rapid expansion, where increasing capital expenditures, higher labor costs, purchases of new equipment, and increased inventory require large cash outflows. At the same time, sales are in a growth phase, and cash inflows tend to lag.
A cash flow analysis of your accounts receivables will show you which customers are slow payers. Working with small businesses and having started many businesses, I know that one of the main reasons businesses fold is not having enough cash or not managing the cash flow well. See, the sad truth is that cash-flow surprises kill many startups. Overall, 90 percent of small business failures stem from this.
So what should you do?
Good cash-flow management, in simple terms, means understanding every inflow and outflow of cash and not putting this function out.
Understand and record cash flow projections
Profit does not necessarily equate to cash
Unanticipated expenses and emergencies
Marketing Expenses exceed sales
Late payments can cause major cash flow disruptions
Faster Growth in the company than anticipated
Tags:statement of cash flows,understanding cash flow,understanding accounting,cash flows operating activities,cash flows,indirect cash flow statement,cash flow statement operating activities,cash flow statement analysis
Connect with Raj, visit www.RajKapur.com
Email: [email protected]
Book a FREE Call www.rajkapur.com/freecall/