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Cash Flow is Critical

Jack Davis and, Heather Gessner (March, 2020)

Summary

Cash flow budget accuracy is critical in developing and controlling the business. A four-year study of borrower’s on average over estimated revenues by 15% and underestimated expenses by 17% resulting in a 300% error in net cash flow. In order to increase this accuracy, businesses need to regularly monitor cash flow and use it to control cost and set selling targets.