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Ways to improve your cashflow

It's not just small businesses that have cashflow problems. 

Back in 2012, Premier League club Portsmouth FC ran the risk of facing liquidation due to the loss of its creditors. Without investment and debts of up to £61 million, the club had no choice but to sell star players, make redundancies and carry out wholesale cost-cutting in order to generate funds. 

Had the club identified its problems in advance, the crisis could have been adverted. 

Here's some advice to help maintain profitability and cashflow, preventing risks of liquidation or receivership.

Monitoring cashflow

Monitoring cashflow is crucial to ensure the financial ability of your business. Taking longer to receive payments may indicate a lack of credit control. This can result in short term debts, leaving you to rely on quicker ways to source more income. 

As a business owner it’s important to note down the key factors that are or could affect your cashflow, followed up by small steps to improve them.

5 ways to improve cashflow

Here are 5 useful ways to help you improve and monitor your cashflow:

1. Cashflow forecast 

This is the flow of money coming in and out of your business. Set up a forecast to manage your cash flows efficiently.

2. Evaluate customer and supplier terms

Set out clear terms and conditions to avoid misunderstandings and strengthening your ability to collect payments later.

3. Credit policy

Credit checking customers and monitoring their payments afterwards is good practice.

4. Managing stocks

Keeping track of your daily sales and the amount of stock you have will help you identify trends and areas for improvement.

5. Cut costs and spread payments

Purchase items when you need them. Spread payments over a period of time. Hiring purchase and leasing can be used to fund equipment and vehicles.

Recovery

Our team can help you identify your problems and recommend solutions to improve your business cashflow. We can arrange a corporate or individual voluntary arrangement, which will allow you to discuss through any difficulties you may have. Speak to an adviser today to find out how we can help you manage your business cashflow.