Cash Flow is King
It’s great being part of the entrepreneurial community in Kansas City where there are many great formats for meeting professionals in accounting, law, financial services, etc. One local group had a terrific networking lunch and learn. If you weren’t able to attend the recent Entrepreneur’s Club meeting at Hereford House, you missed out on listening to and learning from a great business expert,
Tim Sernett, from Virtual Bean Counters. Tim shared with local entrepreneurs some critical aspects of operating a successful business. His main message: “If you don’t know your numbers you don’t know your business!”.
It makes sense to those of us who see businesses every day that fail to understand their cash flow and how it is impacted by changes in Accounts Receivable, Accounts Payable, Inventory, Debt, etc. From our standpoint, it also makes a huge difference in business value.
Understanding how rapid sales growth and increasing receivables, for example, reduces cash flow will help a business owner prepare for a cash crunch and set them up for success. Updating policies to shorten receivables terms and lengthen payables, knowing optimal inventory levels, preparing a budget, and developing a business plan are some activities that could greatly enhance cash flow.
Talk to one of our Apex Business Advisors to find out cash flow drives business value.
“Don’t count on it” according to a recent article in the NYTimes. Not unless you have done some essential planning in advance. Here is what you need to do:
