You can have a profitable business and still fail. In fact, the NUMBER ONE REASON FOR BUSINESS FAILURE is running out of cash.
5 signs you have a cash flow problem:
1) Unable to pay suppliers on time
2) Unable to pay your ATO obligations
3) Unable to make superannuation payments for employees
4) Customers not paying on time severely impacts you
5) Unable to draw a regular wage
5 ways to fix it:
1) Review customer credit terms & start charging for late payments
2) Move customers to shorter payment terms or upfront deposits
3) Negotiate a short-term payment plan with suppliers
4) Stop any excessive drawings from your business
5) Stop any unnecessary spending – if you don’t need it, don’t buy it
The best thing you can do to manage your cash flow is to implement a Cash Flow Budget. This will allow you to see where the issue is and how to fix it. Flying by the seat of your pants won’t change anything as you can’t fix what you can’t see.