A business can unlock additional financing and avoid cashflow problems by managing its finances prudently and strategically.
One of the key financial aims of a business is ensure that it has enough cash on hand to keep the business going. That means both getting paid on time and in full by customers and making payments to suppliers and other creditors when they’re due.
Much of the focus and energy of businesses is focussed on obtaining credit. Businesses must also actively manage their credit to ensure they can meet their credit repayments and to identify any issues as they arise.
Businesses should work with their bank to manage their credit. Some important steps that help businesses to maintain a good working relationship with their bank include:
Getting paid is crucial to a business’s survival. Clear and comprehensive credit management policies, with the necessary systems and documentation, can help businesses to minimise their exposure to potential credit losses and and deal with late payments or non-payment.
Good financial planning helps a business to understand its financial situation and needs and to persuade investors or lenders to support it.