In the last part, you learned some of the very basic facts about business finance. In this part, I will tell you how to deal with the problem of cash shortage and an array of other such factors that contribute to the success and failure of your overall business venture. Here you go.

Cash Is King
When you encounter a cash shortage problem, the first thing that you should do is to inform all the people who are going to be affected because of this. For example, you can start by giving a call to your suppliers and explore your options for renegotiating the credit terms, such as by creating a provision for installments or by extending the due date - something that you can afford. This will not only help you battle the problem efficiently but you will also be able to restore people's trust in your business.

Strictly Follow A Set Procedure For Payment
While you are documenting the terms and conditions for sales, make sure to include payment terms as well. Follow this payment procedure strictly. If a customer is asking for credit, you should grant the same only after checking their background thoroughly. For example, you can do this effectively by getting references from other suppliers that the customers are dealing with.

How To Chase Debts
Chasing the debts the right way is also very important for your business finance. You must follow a set procedure for it as well. For example, an effective way is to sending a duplicate invoice mentioning the due date for the payment and when the due date expires, you can follow up by giving a telephone call to the customer.

Realistic Forecasting
Forecasting can be a good thing for your business as long as you are realistic and not conservative about it. Always remember, realistic forecasting is the foundation for ordering raw materials, negotiating premises, and raising money. While you are estimating about the various components, make sure that your analysis and estimation is based on some facts. At the same time, you also need to be consistent about this forecasting. For example, monthly or weekly forecasting is much better than just one annual forecasting.

Keep Proper Records For Everything
Keeping thorough records for each and everything is also essential for the health of your business finance. If you do not have enough time to do it yourself, you always have an option to hire a professional bookkeeper for this purpose. The objective is to keep a firm track on where your money is going out and coming from. Computerizing your accounts is a good way to do that. There are lots of software programs available in the market that can make the process much easier and more efficient for you.

Last, but not the least, you should always keep in mind that everything is negotiable - whether it is payment terms with your suppliers, the rate of interest payable to bank, and the due date of the debts, and the amount of installments for loans. So, negotiation is also a good part of healthy business finance.

Gaining good control over your business finance is the key to success in your venture. You can visit my website for more business finance tips that will eventually give your business a solid base.

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