Raising Entrepreneurial Capital, 2nd Edition

10

Internal Financial Management

John Vinturella and Suzanne Erickson

Introduction

A prerequisite to any external fund-raising should be a focus on the management of internal cash inflows and outflows. Unfortunately, in many business start-ups, this is an area that often takes a backseat to seemingly more pressing issues. Far too often, the chief financial officer (CFO) position is seen as a luxury to be added later, if at all. Focus is placed on accounting rather than on financial planning and cash flow management.

As any experienced businessperson knows, profits and cash flow are not the same. Accounting statements alone most likely will not provide the information needed to successfully manage the business financially.

Although working capital ...