Emergic: Rajesh Jain's Blog

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Business Monitoring Idea – 5

November 19th, 2010 · No Comments

Another key aspect of the business that needs close monitoring is cashflow. Revenues may be increasing, but if cash is not coming in on time, one can face a problem in paying vendors and employee salaries. For this, it is important to have rolling weekly estimates that look a month ahead on both expected payments and collections.

For collections, it is important to also monitor aging. Anything beyond 90 days past payment due date is likely to face a challenge in being collected. As such, even though there is revenue on the books, one may face the prospect of write-offs at a later date and cashflow concerns in the short-term.

I shared some of these ideas over the past few days because these are tips I have found useful and, in some cases, have learnt them  the hard way. I hope you also found them useful.

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