Effective Debt Management Holds the Keys to Small Business Cash Flow and Growth
Effective debt management through a robust accounts receivable system is essential for small business cash flow and growth, necessitating automated payment schedules and strategic policy adjustments. Collaborating with a collection agency as a strategic partner can enhance revenue recovery while preserving positive customer relationships.
How critical is effective debt management for the financial health of small businesses, particularly in maintaining cash flow?
Mfon Akpan, CGMA, Assistant Professor of Accounting at Methodist University, stresses the importance of collecting outstanding debts to avoid unnecessary borrowing and strengthen a business’s financial position. “It’s very important to collect outstanding debts that carries over to the financial health of the business. You don’t want to increase any borrowing, which can damage or weaken the financial position of the business,” Akpan says.