Why cash flow is so important for your business

Hello Subscriber,

Most salespeople in selling roles understand that profit is an essential element of business success. If a company is selling lots of their products and services but making little or no profit, they’ve not got a bright future!

In contrast, a lot of salespeople are relatively unaware of another critical component of a company's financial health.

Cash flow!

Cash flow is one of those topics where a person’s experience can have a huge impact on the level of their knowledge. If somebody has any experience of running a business, they will be VERY aware of the significance of cash flow.

What is cash flow?

Dry and technical definitions of cash flow speak about the cash that comes into and out of a business in a particular period of time.

In the real world, cash is the lifeblood of a business. Without cash available to pay bills when they’re due, a company is doomed, even if they’ve been achieving very profitable sales.

A company might have full order books for highly profitable business in the future. But if it can’t pay today’s bills like salaries and suppliers, the company is insolvent and cannot continue to trade.

This means that salespeople MUST pay attention to WHEN payments will be made. It’s not enough to focus our attention only on profit margins when working with customers.

If a customer asks you to extend their payment terms, perhaps from 30 to 60 days or more, please be aware of the impact.

How would you feel if your company suggested to you that you wait an extra month or more for your salary or commission?!

How to be best buddies with your finance team!