When I ran a business I liked to have 2 payrolls worth of cash set aside. So, if a customer was late paying by 3 weeks we'd still be OK. This turned out to be a

When I ran a business I liked to have 2 payrolls worth of cash set aside. So, if a customer was late paying by 3 weeks we'd still be OK. This turned out to be a pretty cautious approach and we were never in danger of missing a payroll (or the following one). Keep in mind payrolls are for work that's already been performed. Having enough cash set aside for the work that's been performed plus a month of future work is having 3 payrolls worth of cash set aside at all times. I could see it working if all companies had to do it, but in a scenario of two identical companies where one can spend more freely they're probably more likely to grow.