3 THINGS YOU MUST DO BEFORE APPLYING FOR BUSINESS FINANCE Funding and Business Growth Playbook T: 0330 350 3356 @: hello@GrowingYourNumbers.com www: growingyournumbers.com
Cash Flow
The word ‘Flow’ is normally used to describe a moving liquid as it ‘flows’ from one place to another . This is a good way to describe and understand your Cash Flow as money flows in to and out of your business.
Cash Out and Cash Into Your Business
This is perhaps the most important thing to master because if you don’t understand and actively manage your Cash Flow you are not really in control of your business, so let us use Alex ’s Software Business and see what is happening. How long does Alex ’s business take to pay suppliers?
Paying Suppliers: Creditor Days = 27.2
Creditor Days: This is cash flowing out of your business and Creditor Days is a measure of how long the company takes to pay suppliers measured in days.
Cash Flowing Out of Your Business
Every business is different, so we don’t know if this is good or bad for Alex ’s business without more information, but the movement in Creditor Days is something we can work with because we can work out what it means to Alex ’s cash position.
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