Managing cashflow is going to be one of the most critical factors for your business health over the coming months of rising costs and inflation. These pressures are going to impact us all, so we are here to help keep your business healthy.
What are the things that you need to consider to ensure your cashflow remains as healthy as possible?
Firstly, ensure you have up to date management information. You will need the figures, third parties will need them, and your accountant will need them.
Improved cashflow will help to reduce your management time and professional and finance costs.
What are your current finances for?
General working capital
Capital expenditure
Stock
Staff costs
Project
Taxes
Your own income
Internal finances
How much of your internal finance is tied up in stocks, debtors and creditors?
Stocks
Look at and revise your stock levels.
Sell or return any surplus stock.
Constantly and regularly review.
Debtors
Can you look to invoice more quickly?
Set credit limits
Agree payments terms in advance
Tighten credit control
Prioritise cash collection
Are you debts insured? If not, can you insure them?
Clear queries straight away
Increase prices for slow payers
Do not supply to bad customers
80:20 rule
Creditors
Can you negotiate extended credit terms?
Review your payment terms
Order on ‘just in time’ basis
Sale or return
Timing
Look at the timing of payments, can you move things to improve your cash flow.
Consider your standing order and direct debits. Think about your VAT periods– you may want to consider accelerating purchase invoices and deferring invoicing (not payment dates) to improve your cash flow. Look at what is in your pipeline to try and spread the liability. Alternatively if you are on the accruals basis you could benefit by moving onto cash accounting for VAT if you meet the criteria.
Overheads
Overheads can be a huge part of your cashflow, especially with the rising cost of energy and fuel. Can you review supplier terms? Look at the costs of your premises.
Can you put off any planned annual purchases and if so, how will that impact your business?
Is there any funding available to help improve your energy efficiency?
Have you thought about changing your company vehicles to electric? There are lots of tax benefits available. Check out our guide to Green Transport for more information on this.
Finance for Growth funding
Finally, don’t forget, if you are a business based in North East Lincolnshire, North Lincolnshire, Hull or the East Riding of Yorkshire, there is funding available to help you with your finances to give you a clearer picture of where you are now and what you need to help you through the coming months.
Funding is available for business consultancy for any financial advice we can offer you that sits outside the normal accountancy services.
Some examples of the types of projects we can support include:
Production of a business plan
Preparation of financial projections supporting a growth/recovery plan
Expert advice – financial reviews, strategic reviews, recovery plans, growth plans
Gearing up for the next stage of financial investment
Development and introduction of a financial management system/reporting
If you are interested in getting help and advice with your finances, then please do get in touch for an initial conversation on this.
Business grants of between £1,000 and £2,500 (40% intervention rate) are available.
Minimum Grant - £2,500 – Maximum Grant - £6,250
Funding is easy to access, can be available in 5 working days and is running through to June 2023.
Don’t miss out on funding that could help you to a brighter and healthier business.
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.