chapter  3
9 Pages

Cash flow

Remember the difference between debtors and creditors. They are easy to confuse, but:

debtors owe money to the business; the business owes money to creditors.

To stay in business and make a profit an organization must make sure that cash is available in the right quantity and at the right time to meet its commitments. To understand why this is so important you must get to grips with the fact that profit and cash are different.