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M1 Business

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Submitted By yokiran
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Cash flow problems and solution for those problems are below
When company is struggling to payback the debts and it’s due to pay that’s called a cash flow problem. Low profit or losses when the business running out of the money. The company is not making enough money. In this case most of the time company run out of money. This is not good for the company. Solution for these problems is to always keep some assets for rainy days this will help the business to keep running the company for example: furniture, laptop and printer.
Over investment: when the company spend more money in product and buying big machines. Sometimes the company don’t really need it. Company spend more money on these things which occur the problem at the end to the company. To solve these problems businesses always need to make sure that the assets they have bought must use in the business like machinery, building and transport.
Too much stock: when the company produce more product than they need it that’s called too much stock. This is not good because the trend changes, customers taste and lifestyle changes. These raise the risk of out dating the product. Solution for this is to company needs to make sure that the production department produce the product at exact amount. So they can sell to the wholesaler as well to discount retailer.
Allowing customers too much credit: business gives the credit cards to the customers they called trade debtors. This helps the business to enhance the business revenue. Giving too much credit to the customers also create problems for the company. Sometime customers don’t pay the money back within time period they are given. Its create problems in the cash flow. Solution for this problem is don’t give credit if you are running a small business. Give them a time period to return the money within 30 days not more than that.
Overtrading: when the business

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