The Challenges Of Cash Flow
The founders of a small consulting firm recently received a letter from an important Fortune 500 client that the large company would extend its payment terms from 90 to 120 days, “a fancy legalese version of “we’re going to start paying you later because it’s better for us: get used to it,” she says. While she waits four months for payment, this entrepreneur must meet the payroll for her two employees: pay, rent, utilities, insurance, and a host of other operating expenses: and purchase new computers and other technology to support the work her staff does. Managing cash flow for her business has become more complex, a situation that many small business owners are facing as large companies stretch their account payable and speed p collections of their accounts receivable.
- Q1. How typical are the cash flow problems that these companies face? Explain.
- Q2. What advice can you offer business owners about managing their cash flow?
Please ensure you “discuss” and “describe” as required, providing a clear understanding of the material! You are graded on your critical thinking skills and understanding of the concepts.
Grammar, spelling, and punctuation are expected to be correct and professional, and references need to be fully and properly APA formatted.
Scarborough, N. M. (2019). Essentials of entrepreneurship and small business management (9th ed.). Upper Saddle River, NJ: Pearson. ISBN 13: 9780136879664