Running your own business comes with a wide variety of challenges, but one of the biggest is managing cash flow, the lifeblood of the company. Yet businesses often underestimate its importance, instead thinking that as long as they are busy earning revenue then their business will survive and grow. However with regular outgoings such as wages, rent, stock and utilities to pay, without adequate cash flow their businesses may stagnate and fail.
This is especially important for businesses in Asia, which in a global survey by PwC, was found to be the second-worst performing region in terms of net working capital. This means that when compared globally, businesses in the region are the second slowest at converting their working capital into cash, indicating that company money is tied up for extended periods, negatively impacting day-to-day operations and growth. While this finding is taken from an average of companies operating across the region, it indicates that companies in Asia have a significant opportunity to improve and create greater business value from the resulting liquidity.