Is your business experiencing cash flow issues? If so, one of four classic culprits are likely to blame. Pay attention to these issues, and watch your finances improve.
Culprit #1: Poor Collections Practices
The most common culprit of cash flow issues is poor accounts receivable practices. Be sure to invoice promptly and follow up on overdue payments.
Culprit #2: Low Pricing
If your pricing is too low, you may not have enough of a profit margin to cover your expenses.
Culprit #3: Low Sales
Many times, the real cause of your cash flow issue is that your sales are too low relative to your fixed overhead.
Culprit #4: High Production and Fulfillment Costs and Expenses
Be sure you analyze your costs of doing business (including labor, raw materials and overhead) to see where you can enhance savings.