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.