Managing Receivables and Payables
My grandfather used to say, “Live within your means and don't spend the money you don't have in your pocket.” On the surface it may seem like an old-fashioned point of view, but it is essentially the golden rule of liquidity, applicable to individuals and business entities alike. Let's face it, if everyone lived by this precept, the global credit crunch wouldn't have happened. Keeping expenses below revenues and collecting receivables before paying bills are two strategies that together guarantee positive cash flow. Of course, it is easier said than done.
Ideally, we would be happy if our customers prepaid in ...
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