Page 84 - MICROHUB Handbook - ENGLISH

What can you do, then, to prevent your company from going

bankrupt and failing?

Making a cash flow statement and projection is the greatest method to

keep a close check on how much money is coming into and going out of
your company. You may compare your projected monthly cash flow with

your actual monthly cash flow using these very basic financial records.

These days, a cash flow statement ought to be one of the regular

reports in your accounting software. If not, you may easily construct

these documents on your own without any prior accounting knowledge

if necessary.

Choosing adequate payment terms is a crucial step

in managing the cash flow issue for your small

business. Many companies that sell directly to

consumers accept payment right away.

On the other hand, extending

credit to clients and customers may be a

successful strategy for generating new
business and fostering trust, but it will

also have an immediate effect on your

cash flow. There is also the ongoing issue

of late payments to consider. It is important to

consider how you can encourage your clients to

make on-time payments because late payments are

a major source of cash flow issues.

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