Cashflow

Despite what I wrote a few weeks ago, the credit crunch is now having an effect on my business.  Clients are taking longer and longer to pay me and using the gamut of institutional half-truths to explain the delay.  For example, after a delay of a few weeks two separate clients have asked me to resubmit invoices for completed work quoting Purchase Order numbers that are mysteriously yet to be generated.  And on several occasions I've been told that my (approved) invoice got into the system just after the deadline for the next payment cycle.

Even so I'm better off than my larger competitors as I carry few overheads and employ no staff.  So long as I can make the rent and pay the grocery bill I'm okay.  If I did have staff I'd be obliged to pay them every week and by now I'd be deep into an overdraft and so at the mercy of my bank.  Every pundit emphasises the fact that the banks' smaller customers won't be getting any love any time soon.

As it is my company doesn't have an overdraft facility.  In a previous existence I learnt that once a business has access to credit it takes a lot of discipline not to become reliant on it.  Famously Microsoft has always self-funded and keeps sufficient cash reserves to operate for an entire year without revenue (currently around $20 billion USD).

It's a pretty exciting time to be running a debt-free business.