Does managing your cashflow take up too much of your time?
Or do you not have enough time to properly manage it at all?
Cashflow is a top priority in every business - even a profitable company can run out of cash (see our article on overtrading in our free resources section).
Companies fail for one ultimate reason - they run out of cash, and very few companies are immune to cashflow pressures at some time or other. Cashflow really is the lifeblood of your company - a business dies without it.
How to protect your business and improve your cashflow
The great news is that you can protect your company from developing cashflow difficulties.
How? By making sure you have your finances under control -this means knowing exactly how your business performs every month, and measuring the key things that can cause cashflow problems, so at least you will see them coming in time to do something about it.
Getting out of a cashflow crisis
Get help - these things rarely resolve themselves, especially as cashflow difficulties tend to mentally drain you, leaving you less able to clearly see the way out.
Start by setting up a rolling 13 week cashflow forecast. Not only is it the first thing the bank will ask for, but it's a god- send in helping you to map out the next 3 months and to work out a short term survival plan. We have been helping our clients manage their cashflow for years and can help you with this.
Next talk to your bank manager if you have not already done so - but make sure you have your facts ready before you do - they will expect you to know exactly how and why the cashflow problem has arisen and what you are doing about it. They will also expect you to have accurate management accounts so they can see how your business is doing.
Banks will rarely fund losses, so don't expect them to bail you out if this is what has caused the problem, unless you have a turnaround plan to talk them through.
Please make sure you are not going over your facility limit without authorisation or bouncing payments - these things get flagged up in the bank and affect your credit rating, making it harder for them to help you. Also bounced payments will make it very difficult for you to change banks if you want or need to.
It's often a good idea to talk to an independent funding expert before approaching your own bank, to make sure you know your options first, and know if other funders could help if your bank is going to be unwilling. They can also help you prepare and present your case in the best possible light to your bank.
For more detailed information on this we have an article titled "Crisis cashflow management" in our free resources section and our special funding report that you can download from our home page - both are packed with essential information to help you manage your cashflow and your bank.
If you would like to talk to us or our funding partners about improving your cashflow then please call us, or email Sandy@people-share.com
We offer a full credit control service which is very often key to cashflow management.