Not long ago I gave a presentation to small business owners to answer the question “My accountant said I made money, why can’t I pay my bills?” Good question. I was amazed at how many business owners did not have a clue as to the answer. Most of them did not seem to realize the impact of their practice of paying vendor invoices and collection of receivables often were not in balance causing the cash shortage. For example, if you pay your vendors in about 30 days, but collect from your customers at 45 or 60 days, you will need enough cash to cover other operating expenses (such as payroll) for 15 or 30 days.
This imbalance is just one of the ways cash and earnings may not match. Call your SBDC at the Toledo Regional Chamber of Commerce for a no cost review of your financial statements and let us help you answer the question “Why can’t I pay my bills?”
This imbalance is just one of the ways cash and earnings may not match. Call your SBDC at the Toledo Regional Chamber of Commerce for a no cost review of your financial statements and let us help you answer the question “Why can’t I pay my bills?”
 | Charlie Chambers is a Certified Public Accountant and a Global Certified Management Account. Charlie was employed at Owens Corning for 28 years before striking out on his own and has worked as CFO or Controller at a number of area companies. Charlie now serves as the Lead Financial Consultant for the SBDC and has a passion for helping small businesses to grow. |
RSS Feed
