It’s all about cash

by | Feb 26, 2021

How much do you have in the piggy bank?

If worrying about the cashflow within the business is not keeping you awake at night that’s a good thing.   

We have all heard that businesses fail through lack of cash as opposed to lack of profits.  But we cannot assume all people in business understand the difference between the profit and the cash position.   And that’ s when things can come unstuck.

Let us look at questions that as the Owner/ Leader you would ideally be able to answer about cash and solvency.

  1. What is the cash position today?
  2. But more importantly, what does the cashflow forecast look like and what decisions might it influence?
  3. How much cash reserves does the business have in relation to expenditure, as measured in days, weeks or months? What is your comfort level ?
  4. What facilities or cash reserves are available to fund the business?
  5. Does the business carry any debt? If so, are there any bank covenants and are they complied with?

If this has raised any areas of concern for you, or you simply feel self-conscious because numbers aren’t your strong point, can I recommend you ask for some help. Ask your accountant to regularly furnish you with this information in a format you understand.

Being on top of your numbers enables informed and timely decision making, building the foundations for a more resilient business.

Debbie is the friendly face of finance. Very much a people person that happens to do numbers. She coaches business owners and leaders to demystify their numbers thereby building the foundations for a resilient business. ss

Written By Debbie Millard

Master your business through strong leadership, knowing your numbers and empowering your people

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