6 steps to make sure your cashflow is king!

Cashflow, rarely understood or explained in a sentence
(and sorry to disappoint but I won't try in this blog either)
but every business relies on healthy cashflow in their
accounts.
Are you financially fit enough to meet the cashflow
demands on your business?
Here's a few pointers to make sure you allow cashflow
to be maximised in your business:

1. Sharpen your billing process
make sure you bill debtors promptly, ask creditors to
extend their terms to you and offer incentives for
invoiced clients if they pay you promptly. Maybe
consider a percentage reduction for early payment.
For longer, ongoing jobs you should always discuss
the dates and amounts for payment beforehand.

2. Focus on your market expertise
it can be difficult to stock and track lots of small
numbers of items. If you are stuck with stock then
it isn't producing returns for your business. So get
rid as quickly as possible and then concentrate on
your mainstream market.

3. Use credit reference agencies
do check that your clients are going to be able to
pay you back. The best deals in business can
sometimes be the ones you walk away from!

4. Restructure your finance
I often wonder how even small businesses can often
have 4 or 5 lenders for cars, assets, funding etc.
A review of your current situation from an independent
adviser may create a saving without affecting your
ability to deliver.

5. Cut your overhead costs
now I don't mean staff, I mean the everyday items
that you use day in day out; telephones, stationery,
electricity, waste, packaging, gas..... If you save
£10,000 on your bottom line in a year and you have
a 20% profit margin then that's the equivalent of
putting in an extra £50,000 of sales without the
same inherent risks.

6. When all else fails
if the above still won't be enough to stop the worry
of cashflow in your business, if things seem tougher
than they ought to be then talk to somebody who
understands insolvency. You'll be amazed at what is
available to help small business rise up again.

This article does not constitute regulated advice. Please
remember that any action regarding financial advice
should always be taken only after considering the specifics
of your own situation.

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