With tough economic times prevailing, businesses should be aware of the importance of healthy cash flow to thrive and survive through this period, according to Marc Peskett of accounting and advisory firm MPR Group.
Peskett, partner of the Melbourne based firm, says cash flow management should be the top priority for businesses this financial year.
“Failure to constantly review and manage cash flows, particularly in this environment, is the key to avoiding financial strain and ultimately preventing business failure.”
“It’s no secret that businesses that have cash or access to cash will have a better chance of survival than those businesses that need to borrow to keep their doors open,” he added.
Peskett says there are many ways to accelerate the flow of cash from customers to the business to stay afloat, even for those currently without a cash-flow budget.
“One of the most important things is to put together key data such as sales and expense forecasts and then set up a simple budget worksheet that tabulates cash flows, such as your beginning cash balance and your budget cash inflows and outflows.”
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