Cash flow is the most important issue in my business

Cash flow is the most important issue in my business

Do you agree? Many of our other clients do. In this uncertain economy, managing your cash flow is more important than ever.

Female business owners discussing cashflow

If you are concerned about future trading conditions, then take some time to reflect on where you are and what could happen in the next few months. It is important for all businesses to plan ahead for a range of scenarios. Cash flow and business planning in these uncertain times may appear problematic, but there are some practical steps you can take to minimise potential disruption to your business:

● Review your budgets and set realistic and achievable targets for the remainder of 2022 and into 2023;

● Get your employees involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues;

● Review and flow chart the main processes in your business (e.g. sales processing, order fulfilment, shipping, etc.) and challenge the need for each step;

● Put extra effort into making sure your relationships with your customers are solid; and

● Review your list of products and services and eliminate those that are unprofitable or not core products/services.

We specialise in helping our clients manage their cash flow. We do this by preparing and updating detailed cash flow forecasts using the latest and most powerful software. We can also help you negotiate or renegotiate overdraft facilities and find specific funding to help you grow!

Please talk to us about cash flow planning for the next few months. We can offer a template so you can do this yourself or work together to produce estimates for a variety of scenarios.

Working capital – Overview for businesses

Working capital finance solutions offer businesses the opportunity to improve cash flow. The world of commercial finance and asset-based lending (ABL) is complex and expansive with products, terminology and contractual interpretation varying from lender to lender.

The benefits of arranging working capital are:

● Up to 90% of outstanding invoice value can be advanced within 24 hours;

● Flexible lending – funding increases in line with your growth (UK and Export);

● Confidentiality – lenders can offer a completely confidential service – your customers need not know you have a facility in place;

● Lenders allow you to manage your funding at all times;

● Sector-specific finance is often available;

● Structured asset-based lending (ABL) – funding for management buy-outs/management buy-ins; and

● Trade Finance & Supply Chain Finance Solutions.

Specialists in this area can advise on:

● Invoice finance – an effective way of quickly accessing a proportion of the value (up to 90%) of your invoices. A business ‘sells’ its invoices to the lender in return for accessing cash at the point products and services are sold. Specific sector-based offerings are available, as is the ability to arrange finance for selected invoices only.

● Structured ABL – generate a higher level of funding by unlocking the maximum value tied up in the combined assets within your business, including debtors, inventory, plant & machinery and property. Additional forms of

funding can be structured in addition to this, such as top-up loans to drive growth.

● Trade finance – supply chain finance with various options, enabling the purchase of goods from overseas where you are otherwise unable to obtain credit from suppliers.

Typically, you will need to ensure that your management accounts are up to date, you make available current detailed lists of debtors and creditors, and you might need up-to-date projections before an expert will consider your application. Please talk to us about finance – our working capital finance experts have many years of knowledge and success in advising businesses across a wide range of sectors in obtaining working capital finance solutions.

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