As the company begins to grow and encounters modifications and the challenges, the following needs to become the focus of all stakeholders if that growth could be sustained:
- Maintain basic financial management principles: to sustain the expansion attained, it is crucial to keep or implement the fundamental principles such as book-keeping, current asset management, appropriate working capital policy. This requires consistency, discipline and perseverance since this is very easy and everybody knows it.
- Keep proper accounting & financial documents: This sme business loans singapore has to be performed and quite well because this will serve as the basis for analyzing the performance of the companies using the ratio analysis. The link to preserving financial management practices of the owner-manger will get a better picture of the situation their businesses take suitable action to salvage it and may be in.
- Distinguish between profit and cash flow: cash flow is not the same as gain. Gain is confused with cash flow and it is very misleading. A profitable firm may not be liquid as a result of insufficient cashflow. The reasons might include more debtors at the current assets that were not paid and more inventories. An indication of inferior assets direction.
- Manage cash flow throughout the following:
i. Regularize its cash flow. Irregular cash flow was an issue. The company must have cash flow
ii. Liquidity structure has to be improved. It follows that there must be a trail.
iii. Boost debtors’ control by credit given screened taking their credit history.