Question

Discuss the challenges faced by the entrepreneurs in developing the cash flows management solution

Answer 1

Ans Proper cash flow is very important for survival of any business.The challenges faced by the entrepreneurs in developing the cash flow management solutions as-

1. Check clearance- Nowadays transactions through banks will block the cash till clearence of checks.Hence, entrepreneurs have to wait till clearence of checks.

2. Timely payments of bills- For timely payment of Bills there must be proper availability of cash is necessary.If there is delayed in check clearence then, will delay payment process.

3. Delayed invoices - Due to credit transaction invoices are paid after sales as per agreed period mostly 30 days.During this credit period entrepreneur have to manage all expenses from its own related to working capital requirements.There will be a risk of bad debts too which will be also bear by entrepreneur.

Solution-

1. There must be a proper planning & budgeting to maintain cash flow for business.

2. Down payment will cover maximum cost as well as some profit of the product or services.By this if remaining amount will not be received will not create a fund blockage to the entrepreneurs.

3.Business policies are designed in such a way which accelerates payments of invoices such as cash discount on cash payments and so on.

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