Post by sharminseo on Nov 12, 2022 22:03:22 GMT -6
Cash flow problems are commonplace for business leaders especially in small structures. Delays or defaults in payment unforeseen expenses, poor anticipation of charges, payment delays… so many reasons why a company's cash flow can be jeopardized for lack of sufficient capital. This situation, if it generally recovers fairly quickly, can however generate a veritable vicious circle for the company: difficulties in paying its charges, then its suppliers, and finally its employees. With, on the horizon, the frightening specter of the state of insolvency. How to manage the gap between working capital the resources available to the company in the short and medium term and the need for working capital (the resources necessary for the company to cover its current expenses while waiting to collect revenue.
How to put an end to the puzzle of the money outside that is to say the money that the company expects to receive. What are the means that allow companies to better manage their cash flow? Why do companies always have money out there? What are the risks ? Having sufficient cash is an essential criterion for the success and Bulk SMS Service sustainability of a business. A healthy cash position enables it to meet its daily expenses, manage the gap between receipts and disbursements, and meet its financial commitments when they come due. Chronic cash flow problems are a major cause of bankruptcy. Indeed, when a company finds itself unable to pay its expenses, difficulties tend to accumulate.
This is the famous vicious circle mentioned in the intro. Some sectors are notoriously more exposed than others to cash flow problems, such as industry or construction, due to extended deadlines and the omnipresence of bad payers. From a lack of cash to the prospect of a receivership (or even a judicial liquidation), there are therefore often only a few steps. This is why most business leaders pay particular attention to their cash flow, and monitor the differences between cash inflows and outflows. However, there is nothing abnormal or pathological about such discrepancies. In reality, they are due to the very nature of commercial activity: for example, when a company delivers goods or a service to one of its customers, it is not paid instantly. The law thus sets the payment deadlines at the 30th day following receipt of the goods or performance of the service.