Small businesses that are just getting off the ground often have problems with the difference between cash coming into the business and cash going out of the business. For example, if the company allows far too lenient credit sales terms, customers do not pay on time, which could cause cash to come in too slowly. That's why all businesses must keep a careful watch on their ______.

a) advance payments accounts

b) asset summarization

c) recording processes

d) cash flow

Small businesses are characterized by limited scale of operations and small quantum of revenues. Thus, small businesses in their initial stages have to deal with the common problem of shortage of funds owing to delay in receipts from debtors owing to relaxed credit terms.

The receipts are not received on time while the expenses accumulate which leads to a situation of cash crunch wherein it gets difficult to meet expenses and liabilities.

Thus, to avoid such situations businesses have to consider their credit policies and credit allowing limit so as to ensure enough cash to meet day to day working capital requirements.

This points towards being careful of cash inflows and outflows and efficient management of cash flows, keeping check on receipts and payments to ensure smooth operations.

OlanmaE OlanmaE · Answer 2 · 2021-11-19T12:42:02+01:00

In running a business, managers must make sure that they carefully analyze the movement of money into and outside the organization. To monitor this, all businesses must keep a careful watch on their

d) Cash flow

Cash flow refers to the influx and outflow of money into the organization. If this is not done, they might lose sight of their financial records and run into a loss.

Money spent in investing, operating, and financing the organization must be accounted for. Analytical methods such as the debt service coverage ratio, and free cash flow can be used to monitor this.

Therefore, option D is correct.

Learn more here:

https://brainly.com/question/10922478