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All the best,
The SK Accountants team
Thank you for getting in touch. A member from our friendly team will aim to get back to you shortly.
All the best,
The SK Accountants team
Thank you for getting in touch. A member from our friendly team will aim to get back to you shortly.
All the best,
The SK Accountants team
During the cost-of-living crisis, you may be feeling concerned about the cash flow of your business.
As a business owner, cash flow issues can be one of the most crippling problems your business might face.
Unexpected circumstances, such as financial liquidity issues, errors with bank transfers and customer payment delays, can lead to serious downturns in profitability that could disrupt day-to-day operations and even threaten the long-term health of your business.
Put simply, if you have more money going out, than coming in, you could soon face issues with your ability to trade effectively and put your business at risk of insolvency.
Fortunately, however, there are practical steps you can take to improve cash flow and overcome these common but daunting challenges.
What steps can you take?
There are many helpful strategies for solving cash flow issues, that allow you to effectively manage your finances, without sacrificing essential operations or compromising your future growth.
You should complete revenue forecasting to understand the expected profit and loss of your business.
Taking the time to understand and analyse current cash flow patterns is key in finding the best solution for any given organisation.
One option is to look for financing from external sources such as investors, loans, or grants to meet shortfalls in cash.
You may feel concerned about applying for loans, but if your business could benefit from some extra cash, this could be a worthy decision with a high yield.
Of particular interest, might be invoice financing, which effectively allows you to take out a loan against expected payments from your customers.
Other solutions you can consider include options such as reducing expenses, securing an advance on customer payments, and renegotiating payment terms.
For example, if there are recurring expenses that are not necessary for operations, taking action accordingly by cutting those costs could greatly reduce strain on cash flow.
It’s also helpful to use financial tools like budgeting software to help track and forecast future cash flow needs, as well as credit control systems that can chase outstanding payments on your behalf.
Lastly, developing a plan of action that addresses the core cause of cash flow problems can go a long way in preventing similar issues from arising in the future.
If you are concerned about your cash flow issues, contact us today for advice.
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