Cash flow or fail! Because money talks. And it is especially talkative when you don’t have any, nagging money worries keep people up all night and worried all day. Most of us have been broke at some point in our lives. Most people will have had to adopt certain strategies or habits to ensure they get their finances back on track. And that is without us even considering the complex landscape of the business world.

Cash flow

Well if you do then you might not be shocked to hear it has been reported that following the month of march over 62% of businesses across England have had a turnover considerably lower than the normal turnover during and in the wake of COVID-19. Even though we are now out of lockdown and slowly edging back to our day to day lives, people’s livelihoods have been put in such depredation that some of the businesses may never recover.

No cash- no business

Businesses now have surplus outgoings that did not exist before. Maintaining the protection of staff (PPE) and continuity of work which will exacerbate workforce costs. Also, along with preparing for recovery, adopting a new strategic approach to business in a market that has evolved beyond recognition.

This is why it is really important to be in the know when it comes to what your business needs, old or new. Be savvy with cash flow forecasting.

We too know the strain and anxiety of the current climate and the pressure it puts on business owners and businesses alike. But not to worry we’ve got your back! With the right knowledge base and pre-prepared strategy we can help insure against cash shortfalls.  And assist you in building up a cash balance to plug any gaps and better manage your revenue stream.

How to improve cash flow

Cash flow is the lifeblood of a business new or otherwise. A sustainable flow of cash refers to an on-going stream of revenue. In these challenging times it is more important than ever to ensure you have support when managing your business and its finances. A cash flow report tells you what cash is flowing in (measured by receipts) and flowing out (measured by payments) of the business over a period of time.
Without the appropriate consideration or forecasting of cash flow then a business could find itself insolvent if unable to obtain new finance and generate cash.

No cash equates to no business. Lacklustre to damn right poor cash flow management is one of today’s leading causes in the (unnecessary) failure of new businesses. Whether it is a necessary reshuffle or helping you employ better practices we can show you how to be more pro active with your finances.

While of course you can borrow monies in harder times, cash affords you much welcomed safeguarding against foreclosure and defaults on loans. Cash flow affords your business greater flexibility in the face of newly surfaced teething problems and making critical business decisions.

Other stuff with cash flow

You need to know when money is coming in and coming out and you must remain mindful of contingencies. An effective “receivables” or “credit” management plan will ensure reasonable and timely repayment of funds owed.  Thus, you’re more accurately able to forecast estimations of what monies you will have at the end of the month. This enables you to be mindful about to who your money goes out to and when. For example, you may need to pay employee salaries or landlord rent and utilities (fixed outgoings). These should be reconciled first before suppliers who might be willing to give you some grace time. After all, sustainability and growth require cash. Pure and simple.

Potential investors will want to see operating cash flow along with revenue and net income. This will help to get a more overall accurate overview of the business figures in full. Investors will want to view cash flow because it is a reliable way of determining business health.

A decent cash flow forecast should address two important areas; WHEN do you receive and pay cash followed by HOW MUCH do you receive and pay cash from/to?

Numbers are the most frightening part of business but they’re always most truthful. In these times of uncertainty, with the right guidance you can harness the power of numbers. You can get ahead of the curve and become the business rockstar we know you can be.

Get in touch today to see how we can help improve your cash flow!

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The Numbers Crew – Here to help you!