Cash FlowIt is quite common for small and medium enterprises to focus on growing their market shares and increasing their sales. With proper planning and strategies, many of them do manage to achieve remarkable growth.

While this is great news, expanding too fast comes with a downside. You stand a chance of disappointing some customers if the demand outstrips supply. Again, you are likely to face some cash flow challenges since increasing production come with a large upfront cost.

Keep a close eye on your books

Excellent accounting is the key to coming out of this great rut without incurring massive losses. Establishing financial protocols is an essential part of this success. In most case, small firms need to rely on account receivable to pay off their creditors and other obligations.

Hence, you need to keep the receivable periods as such as possible. Striking a balance between the 30, 60, and 90-day invoices is essential when you are starting out. It ensures that you never run out of operational cash as you wait for the longer invoices to mature. Don’t forget to negotiate better terms and discounts with your long-term suppliers as it can shave off a considerable amount on your recurrent expenditure.

Take advantage of financial products

As the competition in the commercial sectors increases, financial institutions are amenable to working with small and medium enterprises. As such, they have financial products that can suit your specific needs. For instance, taking tax loans eases the need to take a huge chunk of your operating capital from the business.

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By consulting with a reliable lender, you can split your tax bill into easy monthly installments to make it manageable. It also means that you avoid conflicting with the law and incurring massive fines.

It takes a considerable effort and strategy to grow a small or medium enterprise in a highly competitive market. Luckily, good account management and taking advantage of dynamic financial products can help you in this endeavour.