I had this topic sitting in my “unpublished” posts for quite awhile. It was something I wanted to write and share about but never got about doing it. Cash Flow is the most underestimated operation in a of businesses. Reason being, its the most unglamourous task to do. The tasks related to it are usually, chasing of Accounts Receivables by finance and sales, clamping down on resellers / partners credit lines, turn away jobs that do not bring in cash immediately, release staff and reduce operations…etc etc. The list goes on but no tasks on this list will bring about anything other than improving the Cash Flow, thus everyone hates to do it.
But on the other hand, having a bad cashflow meaning that 1/4 of your time every month, you need to do everything that is unglamourous to make ends meet at the end of the month, to pay suppliers, staff, fixed costs..etc and all these are attributed mostly due to bad cash flow planning. This happens without us realizing it most of the time. Where the sales is chasing for AR rather than concentrating on building their pipe and closing the deals. Where finance and management need to sort out Credit Holds, take line of credits, balance AR and AP…etc.
Bottomline, what I’m trying to say is, Cash Flow is equally if not more important than Sales and Revenue. WIthout a good cash flow, you don’t have oxygen. If you don’t have oxygen, you can’t get out to sell, you can’t invest in projects and good people. Again, you can argue that without Sales there won’t be Cash Flow issues. Chicken and egg story but what I’m trying to put across is to resolve and plan your foundations, which includes Cash Flow. With a good cash flow plan, you can run much faster without having to look back and worry about your operations and finance. Anyone begs to differ?
