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Business Secret : Why Cash Flow is KING
Posted on: 07/Aug/2019 11:22:59 AM
- This Infographics shall help you to understand how critical Cash Flow is for any given business
- Cash Flow is the Money flowing in and out of the business.
- Incoming Cash is the Receipts for bills raised or in short called REVENUE
- Outgoing Cash is all the Payments - To Vendors / Employees / Rent / Electricity / Tax Compliance and others
- Every Business has its own cash flow, what determines the strength of any good business is the TIMING of its incoming and outgoing CASH.
- Ideally, Incoming Cash must always come well or just before the Outgoing Cash.
- Always commit your Outgoing Cash after understanding your receivables.
- Have a Cash Flow Projection for each month - This will help you to scale up gradually.
- If there is a mismatch in this timing it is when Outside funds are required to bridge the deficit.
- This outside funds can be from family / friends / Banks Loan / Private Loans / Wife`s Savings / Provident Funds and other.
If you had to take a debt to bridge the mismatch, make sure that
- The tenure is as short as possible, helps you save on interest and makes you come out of debt faster.
- There is a well defined loan Pre-Closure policy.
- Choose EMI that will suit with your Free Cash Flow (Free Cash = Incoming Cash - Outgoing Cash)
- Make Sure that the lender allows you to choose date of repayment every month based on your Cash Flow Cycle.
The open secret in any Business is "Cash is King". Same raw material is priced differently based on how fast you pay cash.
To know more about it, lets meet up :-)
SUSHIL BOKDIA
Bokdia Finance & Estate
Mobile : +91 98841 33636 / 91501 32003
Office : +91 44 2529 1414 / 4959 1414
Address : 71, Audiappa Naicken Street, Chennai - 600 001
Website : www.bokdiafin.in
