Managing cashflow - why is it so important for business survival?
Managing cash flow is the key to running a successful business. Being able to forecast and analyse cash flow accurately, depends on your access to real time up to date accounting information.
Given the current climate and with the uncertainties that businesses are facing, (especially with Brexit looming and the Pandemic still in full flow), it is now more important than ever to be in control of your cash flow - the survival of your business depends on it.
Savvy business owners update their cash flow forecasts and budgets throughout the year, making sure that it if and when their business might experience a cash shortage or problem, they can adjust accordingly.
'Having a basic financial forecast and plan is better than nothing'.
Business planner and management apps such as Float (Resource Planning & Management Software) can be a great tool; enabling businesses to set expectations, plan projects effectively and make confident decisions, with a visual view of their cash flow.
Implement efficient credit control, making sure you get paid on time for the work you are providing. CKLG have implemented the credit control app Chaser, which has automated credit collection, not only reducing admin time but meaning we get paid on time or sooner than we would previously, leaving no old debts. Chaser automates invoice payment reminders using the information in Xero.
Securing funding, for many businesses will help with the pinch points for cash flow. There's a range of support available for businesses to secure affordable funding, but repayment terms need to be planned into the cash flow to make sure you are making wise decisions.
Bounce Bank Loans (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) have both been extended for application to 31 January 21.
If you’ve already received a loan under one of these schemes you can apply to borrow more under the same scheme by the new deadline. However, you are not eligible for a BBLS loan if you have already borrowed under the CBILS, and vice versa. The BBLS interest and repayment terms are more generous than for CBILS but you can not borrow as much.
These repayment terms will need to be factored into your cash flow along with any other deferrals you took advantage of such as VAT payment deferral which is due for payment at the end of March 2021, or can be further spread over 12 months with monthly repayment (opt in required).
Don’t delay looking at your cash flow management, contact our business services team to discuss your options.