No, this also affects software companies, especially those that grow faster than you would organically. The cost in software companies is a cost in people. These people need to be paid. If you are not paid in advance for your software, then you have a cash flow issue: you need to have enough reserves to bridge the gap between paying your developers and you getting paid for your outgoing invoices.
Think of it like this: if you are providing a service, but are not getting paid for this in advance, you are essentially giving the customer a short term loan. You cannot infinitely provide those short term loans considering that you have bills/salaries to pay. It might still be money that belongs to you, but if you do not have it in your bank account when your bills are due, you are insolvent.
Things to be very wary of when looking on your balance is having very low ratio of liquid cash in respect to your debtors post (e.g. unpaid outgoing invoices). This means that if your debtors are going to pay later than expected, you have very little runway to cover that. Now, what risk this poses to your company depends a lot on how many customers you have, whether they pay their invoice automatically, and what their history of late payments is. Furthermore, the same applies for you on the purchasing side: if the majority of your costs are on the purchasing side and you can afford to pay those bills later without getting your servers shut down, then being illiquid is less of a risk. If the majority of your costs is in employees, then you are in trouble: not paying employees is a big no-no, so that increases risks and allows for less wiggle room.
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No, this also affects software companies, especially those that grow faster than you would organically. The cost in software companies is a cost in people. These people need to be paid. If you are not paid in advance for your software, then you have a cash flow issue: you need to have enough reserves to bridge the gap between paying your developers and you getting paid for your outgoing invoices.
Think of it like this: if you are providing a service, but are not getting paid for this in advance, you are essentially giving the customer a short term loan. You cannot infinitely provide those short term loans considering that you have bills/salaries to pay. It might still be money that belongs to you, but if you do not have it in your bank account when your bills are due, you are insolvent.
Things to be very wary of when looking on your balance is having very low ratio of liquid cash in respect to your debtors post (e.g. unpaid outgoing invoices). This means that if your debtors are going to pay later than expected, you have very little runway to cover that. Now, what risk this poses to your company depends a lot on how many customers you have, whether they pay their invoice automatically, and what their history of late payments is. Furthermore, the same applies for you on the purchasing side: if the majority of your costs are on the purchasing side and you can afford to pay those bills later without getting your servers shut down, then being illiquid is less of a risk. If the majority of your costs is in employees, then you are in trouble: not paying employees is a big no-no, so that increases risks and allows for less wiggle room.