Cash flow is the life-blood of every business - a profitable business that does not have enough cash to pay this month's bills can all too easily go to the wall. 

 
Managing cashflow is about balancing the cash coming in to your business with the cash that you pay out over a period of time.  The expectation of a large payment in three months' time does not help if you have immediate bills to pay and risk having vital services or material supplies cut off, or cannot pay your rent and face eviction before the money comes in.  The ideal situation for any business is to have more coming in each week or month than you need to pay out, including enough to pay off quarterly or annual bills (such as VAT and tax).

 
Every business owner/manager must ensure that collecting money owed by customers has a high enough priority within the business, involving the sales team as well as the accounts staff or a dedicated credit controller.  A sole trader must also have an efficient credit control procedure and put regular time aside for this.

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