Importance of Cashflow in business

      

     Over a couple of years based on the most recent statistics ,a resolution was drowned that almost 45 percent  of new companies are closed after a span of nearly 5 years afer they are started,then 65 percent experince the same after a span of around 10 years.This resolution should hit back to you with the questions like,How do the remaining 35 percent be in a position to keep their profile and stay in the market despite the competitive advantage which always seems to be  against them.There is no magic here,it is because this businesses have mastered the principlces of money and intergrate them into their systems do that they take advantage of the system and outsmart the rest of the businesses who haven't understand these basic principles,they have understand how money works and how to use it a weapon to generate more money.The fundamental reason as to why these businesses are always thriving and getting better day by day is because they have mastered how to manage cashflow.To put it in simple understandable format about it's definition,Cashflow is the flow of money(cashform or liquid money) into and out of the organisation.




       Basically before you get started with any business,you must be in a  position to hold some cash which will be used to run the business for the first couple of months to make sure that the cashflow management is at it's peak, ( the money caming into and out of the business is not used to run the day to day business wants for the first couple of months ),this idea is normally used in large companies which are starting out.These companies are more likely succeed because they are able to keep track on the amount of money the business generates,With that being said,they are in a position to determine whether it is a likely scenario that the business will succeed if they decide to venture into this business or not.Cash in newly formed companies is also essential as it allows you to gather for day to day emergencies to make sure that the operations of the company are efficient as possiible without having to have undergone the whole procurement process before the money is withdrawn from the company's bank account,this sometimes is the idea that most people think it is the always good to have all the money for the business in a bank account ,but i can tell for sure,,based on my research that it will significantly impact the company's day to day operations.This really highlights the key importance of always having some cash to run the business operations for the first couple of months.

    Written by ignitepathway,follow and leave a comment if you want me to delve into certain topics which are relevant to you,,

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