Protect your cash flow

Make sure money is available when the business needs to pay employees, suppliers, lenders, and other obligations. A business can report a profit and still run short of cash when customer payments arrive later than its bills come due.

Invoice promptly, establish clear payment terms, follow up on overdue balances, and manage inventory so unnecessary stock does not absorb money needed elsewhere. Coordinate outgoing payments with agreed terms and expected collections.

Maintain a cash reserve suited to your commitments and the uncertainty in your business. Plan for growth carefully, because additional orders may require spending on materials, labor, or equipment before the related customer payments arrive.