Cash Flow on the Brain

by Steve Murphy 0

Interesting series of suggestions and quotes around the importance of properly managing cash flow, from some business folks Down Under.  In this piece, a group of comments are elicited from representatives of various tech startups, so particularly apropos for these times.

‘Failing to track, forecast and plan for cash flow. Growing too fast. Splurging on ‘want to haves’. Doing stuff that adds no value. Overestimating future sales. Hitting a tight spot but not being upfront with suppliers. Taking a set-and-forget approach to receivables. Making it difficult for customers to pay. Committing to long-term supply contracts that don’t afford flexibility around spend. Not accounting for tax obligations and seasonality. Tying up cash flow in stock. And Paying invoices at any cost… these were just some of the many mistakes identified by this week’s commentators.’

The topic is certainly not relegated to just the small business or startup arenas, since cash flow analysis is fundamental to businesses of all sizes. We have emphasized the importance of cash cycle effectiveness in a number of reports, including Digitizing the Business Cash Cycle: Advancements and Partnerships.   Modernizing corporate payments capabilities is one of the four key themes we identify in the commercial and enterprise payments Outlook for 2018.  A worthwhile investment of a few minutes to browse through the article.

‘Inadequate cash flow has been cited as the cause of two in five business failures in Australia *, lending credence to the age-old saying that ‘cash is king’ (an especially unmerciful one at that)

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

Read the quoted story here