| Business advisers will tell you that one of the main | | | | months (as a minimum) with some room for the |
| reasons small businesses fail is cash flow. This is | | | | unexpected factored in. With this information to |
| either because they are not financed correctly in | | | | hand, you can easily see any potential difficulties. |
| the first place, with sufficient funds to see them | | | | Once you have put together your cash flow |
| through the start-up phase, or because | | | | forecast, it is a good idea to take a close look at |
| slow-paying, or worse non-paying, customers are | | | | the expenses part. Examine where you can cut |
| destroying the financial well-being of their | | | | costs, either by finding more-competitive suppliers, |
| businesses. | | | | or by eliminating items that are 'nice to have', but |
| People who run solo or small businesses give two | | | | not essential to your business. |
| main reasons why collecting payments from their | | | | With your expenses under control, you must |
| clients can become an issue. First, they may be | | | | make sure that the receipt part of the equation is |
| so busy doing whatever it is they do to make | | | | taken care of by having an effective collection |
| money, that they simply lose track of which | | | | system. Whichever system you use for issuing |
| invoices have been paid and which are overdue. | | | | your invoices, you need to set up a system for |
| Second, they can be embarrassed that the | | | | following up late payments. Get into the habit of |
| person calling to chase payment is the same one | | | | issuing statements and following up by email, |
| who provided the service in the first place. | | | | telephone or letter, depending on what is |
| Whatever the reason, it is imperative that you | | | | appropriate for you and your business. If you are |
| manage your cash flow effectively or you will | | | | uncomfortable with this, or feel it is not an |
| soon be out of business. You should have a cash | | | | appropriate task for you to perform as the |
| flow forecast that is made up of expected | | | | business owner, your virtual assistant can do this |
| receipts and disbursements for the following three | | | | for you. |