The most important thing for any business is to generate revenue and then collect that revenue. When there is a difficulty in collecting the revenue that was generated, the business can suffer from cash flow problems. It has been estimated that 70% of businesses that go bankrupt were profitable when they closed their doors. In addition, if a small business only plans cash flow once per year, they are nearly three times more likely to go bankrupt than a small business that does monthly cash flow planning. If this is so critical, shouldn't more small businesses pay attention to this management tool? The answer is yes but in many cases, unfortunately, the business owner my either not know how or not realize they should do this or have the knowledge or expertise to do it properly. The savvy business owner will enlist the help of someone or some organization that can help them with this critical task. This task becomes more onerous when the business is a government contractor. The cash flow analysis itself may not be any more complicated, but the factors that affect the cash flow may be more dynamic. It is smart to employ an expert to help the small business in this area.
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