Do I have enough money to buy this for my business? How Can I improve my business cash flow? My business is reporting profit each month but running out of cash. Why is this happening?

How interesting it was to read about “The Times” reported that the majority of loans over £5,000 made to small business owners to ease cashflow and raise working capital. As a result, banks are tightening access to short term credits.

There are plenty of control and management technics that businesses can do to maximise their chances of payment when they have to offer customers credit terms.

The key is to manage that credit actively and keep an eye on their exposure to individual debtors as well as specific sectors, particularly those that are experiencing stress – construction, retail & wholesale, accommodation, food and beverage services are currently in the top of the insolvency services list.

Here are my recommendations that you may find useful:

1-       Business owner will NEVER be able to manage their business cash flow to generate the best outcome without putting a “REAL” control in place. What I mean is, every business must have a cash flow management and forecasting in place for positioning cash levels and managing business cash methodically, realistically with knowledge of your business cash flow pitfalls to ensure business continuity and increase cash availability in your business bank account. I am writing this with 20 years of experience. I’ve seen this so many times and helped many businesses to increase cash position in their business. There is no excuse of “I am a small business”. Even legal and tax authorities are not accepting this excuse. Get in touch with me I can produce a cash flow forecast sheet for your business so you can use it. There are so many software systems out there too.

 

2-       Know your customer and use proper account terms and conditions

3-       Invoice on time and in line with your terms

4-       Chase debts in order of date and monitor the size of the debt

5-       Keep proper notes of all communications

6-       Document any payment plans in writing and consider using an “accelerator clause” that makes the whole balance due if an instalment is missed

7-       Segment into “Won’t pay” v “Can’t pay” and shift your focus on quick recovery

8-       Don’t forget, Creditors who shout loudest tent to get paid on time

Skynet Accounting is providing powerful financial management services in cost effective way.  Please get in touch and book a discovery call.  

Telephone: 02393 553991

skynet@skynetaccounting.co.uk

www.skynetaccounting.co.uk

 

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