by Dr Greg Chapman
This is another in the series of posts on Small Business Best Practice Benchmarks.
Many businesses go bust while making a profit. Cash is King, which is why your debtor position is so important. A business may look at its balance sheet and see an apparently healthy Current Asset Ratio but this measure can hide bad debts. The debtor position can reveal much more about your liquidity. The older the debt, the less likely it is to be paid.
Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success and Price: How You Can Charge More Without Losing Sales.