Now more than ever it is important to understand and manage the cash flow of your business. Whilst things are far from easy there are some measures you can take which can help your business monitor and improve its cash position.
Managing your cash outflows
- Analyse and reduce overheads where you can.
- Prioritise supplier payments to keep your supply chain open.
- Contact suppliers to try and arrange payment terms.
- Postpone large financial outgoings.
Managing your cash inflows
- Raise awareness amongst your finance team of the importance of cash in your business and debtor collection.
- Review aged debtors regularly.
- Keep in regular communication with key or major customers so you keep abreast of their circumstances. Assign responsibility for review and communication to preserve the relationship.
- Anticipate contract problems and renegotiate.
- Arrange payments in advance or deposits.
- Try and reduce errors in invoicing that can cause delays in customer payments.
Updating your cashflow forecasts
- Update your cashflow forecast key assumptions regularly, including the effect of lower sales or delayed or bad debts.
- Tailor your forecasts to show the cash position that fits your business cycle.
- Perform sensitivity analysis on your forecasts to identify worst case scenarios.
Accessing government support
- Arrange time to pay agreements.
- Consider employee working patterns and whether the Coronavirus Job Retention Scheme (CJRS) can be utilised.
- For sole traders and partnerships, access funding from the self-employed income support scheme (SEISS).
- Recover statutory sick pay paid to staff not at work due to COVID-19.
Contacting your bank and/or finance providers
- Apply to access the Coronavirus Business Interruption Loan Scheme (CBILS) or Bounce Back Loan Scheme (BBLS).
- Approach lenders to discuss loan repayment holidays.
- Research other grant funding.
- Talk to shareholders about cash injections or loans.
Finally, don’t hesitate to speak to us. We are here to help with all of the above. For further advice or assistance please get in touch with your Ryecroft Glenton contact.