Maintaining a steady cash flow is key to the survival of any business, especially a small or medium sized company. Even for a thriving business, not managing your cash flow properly can cause problems and result in a lack of cash to fund day to day running costs or growth.
The old adage “Cash is King” reflects the importance of cash flow to all business’ and that remains in the current freezing conditions. Serious interruption to cash flow will threaten the survival of many business’ particularly those in the retail, hospitality and transport sectors. All business’ carry fixed costs and many of those cannot be defrayed.
There is no doubt that developments in mobile communications over the last 20 years have made business’ more adaptable in these conditions. At EFM Financial Management we can easily keep in touch with clients and colleagues and address specific issues and ongoing workloads on an almost business as usual basis.So how can business’ address the cashflow issues:
1.Invoice as normal, even if this means remotely e mailing invoices, this can be followed up by putting a hard copy in the post when conditions improve. Delaying invoicing may cause a problem in the months to come.
2. Get customers to transfer outstanding funds electronically, thus avoiding the cheque in the post syndrome
3. If operating a skeleton staff ensure that someone has responsibility for banking cheques as normal
4. Revise your cash flow forecasts to reflect the current situation, the standing orders and direct debits will be charged whatever the weather.
5. If having cash flow problems speak to the bank, HMRC and significant creditors explain the situation, you won’t be the only one, “don’t bury your head in the sand”.
The nation’s small businesses are under threat, with an estimated 370000 business owners seeking to close down within the next five years, make sure that it is not going to be you!Request a FREE consultation now if you would like to discuss any financial issues concerning your business Mark Davis
☎ 07877 922 791