Maintaining a good cash flow

[Alexandoy]

For a businessman it is important to maintain a good cash flow. That means the business has cash in bank or cash on hand for the needed expenses. For a selling business there should be ample cash for the purchase of new supplies especially when the stocks are already thinning on the shelves. Usually the purchase of supplies is one transaction that is burden to the cash flow so there should always be a regular schedule for such so that the funds will be available without affecting the cash flow. When there is a tight cash flow the tendency is to borrow money which is not a good practice.

 

[Donkiz]

You are very correct, every business needs cash in order to remain in business, without cash the business cannot buy products, pay rent or even pay workers, so it's very important that there's a steady means to ensure that cash is readily available for the day to day running of the business.

Collecting loan from banks or financial institutions to expand an already existing business is not a bad idea, where people usually have problem is when they collect loans to start a new business or when they collect loan for consumption. But if the loan is meant for expanding a business it usually doesn't go bad.

 

[Abigael]

I totally agree with you. A business person should really be deligent in handling business money. He/she should have a clear accounting methods that show how the money is used. The money for adding stock should be put aside and the profits on another account. This will ensure that when new supplies are needed, only the money set aside for them is used. It also really helps the business person to avoid taking loans in order to purchase supplies for the business.