Posts Tagged ‘Keep a Cash Reserve’
7 Basic Principles for the Company’s Financial Health (5)
# 7: Keep a Cash Reserve
This is probably the principle that requires less explanation: simply the unforeseen occur. Although this varies depending on the rotation and size of the company, generally recommend that you try to have at least the equivalent of three months operating expenses as a cash reserve. And please, do not save “under the mattress”, ask your bank for any investment vehicle to meet your needs.
One of the most important benefits of applying these seven principles is that they are aimed at protecting the business’s working capital, which is like “oil” that allows the engine of your business function well and generate sales revenue.
As we see, is not so difficult to make good decisions about money management, if based on good business practices. Now, I invite you, with a vision of long-term business, meditate on the seven principles, and consider the next time you need to make decisions in your company money.
Read the rest of this entry »