Watch your cash flows

Watch your cash flows.

Getting on with your work, without doing that, is a recipe for financial failure.

Figures just released show that inadequate cash flow, or high cash use, account for almost 40 per cent of business failures in Australia.

Poor strategic management accounts for a similar proportion.

And the number of business failures is rising.

The Australian Securities and Investments Commission reported that 7,562 business failures were reported in Australia last financial year.

That was up from 6,745 the previous year.

And the challenges facing Australian businesses have risen sharply this year.

Both consumer and business confidence have fallen sharply, as shock waves from the US credit crunch hit Australian shores.

Credit has become scarce – and dearer than it was.

And soaring fuel prices are eroding both shoppers’ spending power and corporate earnings.

In these tough times, the path to bankruptcy is wider and shorter than ever.