Business News

Poor cash flow management has been the downfall of many businesses so it can’t be left to chance. A regular supply of cash is vital to any organisation, so that it can pay salaries and bills, as well as invest in growth. This is why cash flow management is essential in order to have a thorough understanding of where your money is coming from and to project future revenue to secure company growth.

The dynamic between a company’s sales force and its credit department often resembles that of rival teams, with one blocking the progress of the other. But, ideally, they should operate like the offense and defense of the same side: one fending off the biggest obstacles on the field, to let the other gain enough ground to score. The team wins when a profitable new customer relationship has been established.

Bad debts are not good for a business. Sometimes, you may have followed all the steps to prevent cash flow problems  and late payment, but you can still be impacted by non-payment. When a customer defaults on its bills or is in danger of doing so, the company extending credit to that customer faces a bad debt expense. The bad debt expense must be charged against your company's accounts receivable and consequently reduces the amount of accounts receivable on your company’s income statement.