Why cash is KING

Cash is the lifeblood of any business. Without enough cash, a business cannot pay its bills, invest in growth, or take advantage of opportunities. In this blog post, we will explore some examples of why cash is very important for business operations and why not having enough leads to operational risk and missed opportunities.

One example of why cash is important for business operations is to cover payroll. Payroll is usually one of the largest expenses for a business and it has to be paid on time and in full. If a business does not have enough cash to pay its employees, it may face serious consequences such as low morale, high staff turnover or legal issues.

Another example of why cash is important for business operations is to purchase inventory. Inventory is usually one of the largest assets for a business and it has to be replenished regularly to meet customer demand. If a business does not have enough cash to purchase inventory, it may face serious consequences such as lost sales, dissatisfied customers, damaged reputation, or even closure.

A third example of why cash is important for business operations is to fund growth. Growth is the increase in the size or scope of a business over time. Growth can be achieved by expanding into new markets, launching new products or services, acquiring new customers or assets, or improving efficiency or quality. Growth requires investment in resources such as equipment, technology, marketing, or new employees. If a business does not have enough cash to fund growth, it may face serious consequences such as stagnation, decline, obsolescence, or even failure.

Therefore having enough cash to:

  • cover payroll is essential for maintaining a productive and loyal workforce.

  • purchase inventory is essential for maintaining a competitive and profitable business.

  • fund growth is essential for maintaining a dynamic and sustainable business.

Cash is a great indicator of the viability of the business

A positive cash flow means that a business has more cash coming in than going out. This indicates that a business is probably healthy, profitable and possibility sustainable.

A negative cash flow means that a business has more cash going out than coming in. This indicates that a business is struggling, unprofitable and possibility unstainable.

Therefore, managing cash flow is one of the most important tasks for any business owner or manager.

These are just some examples of why cash is very important for business operations and why not having enough leads to operational risk and missed opportunities.

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