Positive Cash Flow basically means that, after all monthly bills are paid, your business has excess cash in the bank available for expansion, hiring new employees, purchasing inventory, equipment, etc.. Sounds simple, but you'd be surprised at how many business owners ignore this. Why are cash flow problems the number-one killer of small businesses?
Companies aren't realistic when it comes to predicting their income and expenses (they overestimate their income and underestimate their expenses). Companies don't see a cash shortage coming and they run out of money. In order to keep track of your cash flow, you'll need a simple spreadsheet tool, the most common of which is Microsoft Excel. If you don't have a copy, try the free AJAX spreadsheet tool Num Sum.
The idea is simple: enter how much money is coming in vs. how much money is going out. The most important thing is that the values go at least three months into the future, but we actually recommend 12 months. The benefit of having a realistic cash flow spreadsheet is that if you see your bank account going into the red in three months' time, you'll have plenty of time to do something about it.
The importance of watching your cash flow is clear, but how do you keep it healthy in general? Carson offers the following suggestions:
As far as your business is concerned, there is no way to overstate the importance of cash flow. Remember, you can have the most amazing service or product in the world, but if you run out of cash, it won't matter.
Cash flow is important not only to pay monthly bills, but also to continue to grow your business. Obtaining an advance on your accounts receivables gives you the opportunity to place more orders, purchase equipment and invest in other things that enhance your business.
Catamount has the experience and expertise to help your business use receivable financing to your greatest advantage. Invoice factoring allows you to stay competitive in today's market with access to on-going working capital.
Contact us today- we would like to help your business grow.
Catamount has always been there for us and has been very instrumental in helping us succeed.
Without Catamount we would not be where we are today...period. They have been a tremendous help and are very supportive!
When we needed help Catamount stood up to the plate for us. Their service is outstanding...great people to work with!