A business owner’s ability to get a business up and running and to keep the business operating smoothly hinges largely on prudent financial management. Regardless of the quality of a product or service or how compelling of a need it fills, a company can’t be viable in the long run unless it is successful financially.

There are many practical issues involved in the prudent financial management of a business. A business owner must be aware of how much money the business has in the bank and if that amount is sufficient to satisfy the business’s financial obligations. Just because a business is successful doesn’t mean that it doesn’t face financial challenges. For example, many small businesses that sell their products to larger companies, such as Motorola, 3M, and Home Depot, don’t get paid for 30 to 60 days from the time they make a sale. Think about the difficulty this scenario creates. The small firm must buy parts, pay its employees, pay its routine bills, ship its products, and wait for one to two months for payment. Unless a business manages its mon....