It is a myth to think that cash flow problems “just happen.”
You would be shocked at the number of businesses that fail every year because the owner did not see a cash flow problem in time to do something about it.
Cash flow problems can almost always be seen far enough in advance to do something about it.
Rarely is a cash flow problem a sudden event. It is almost always something that accumulates over time, and it is not difficult to see it coming.
In Chapter 8 of my book Never Run Out of Cash: The 10 Cash Flow Rules You Can’t Afford to Ignore, I provide a real-life example I experienced while working with a business owner.
The president of the company had some concerns about his accounts receivable. He thought the process for collecting receivables from his customers was not functioning as well as it could. Money was tight, and he believed the primary reason was a slow-down in collecting receivables from his customers.
Boy was he wrong!
Here is what I found when I asked the two critical cash flow questions.
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