Why is showing that I have a handle on managing cash so important?

Remember the old saying, “cash is king.” It really is, and many a business has failed with sales going through the roof because they do not have a handle on receivable collections, pay their vendors too fast, are too much in debt and more. It’s a vicious cycle, and as a business owner, it’s vital you understand the inflows and outflows of cash out over a 13-week period, comparing that to a 6-week run of actual cash flow. Graphing the inflows and outflows shows you when you’ll have dips in cash that require extending, or using, your line of credit and helps you manage the payments to vendors and collecting on credit your receivables in a timely manner. It’s called a cash flow forecast, and buyers love to see that companies are making business decisions with cash in mind. It’s a culture shift and a mindset that every dollar counts, and bleeding cash is a deal killer in most buyer’s minds.