Manage Cash Flow
"When a profitable business is growing fast, it comes as a shock to the owner when there is not enough cash available to meet the day-to-day requirements"
More businesses fail for lack of cash than for any other reason. A business with positive cash flow will survive indefinitely even when it is making losses.
This positive cash flow does not have to come from trading activities. Owners or business investors can continue to inject money into a business until it becomes self sustaining; perhaps there are surplus assets that can be sold to generate cash with no material impact on overall business performance.
The more common situations where we see businesses getting into cash flow difficulties include:
- Poor management of debtors, creditors and stock
- Undercapitalisation i.e. insufficient shareholder funding
- Declining profitability
- Owners taking out too much cash through salary or dividends
- Large bad debts
- Significant spending on fixed assets
- Bringing new products and services to market
- Moving premises
- Expanding the business too quickly
Most SME businesses don't actively manage cash flow, nor do they have the necessary financial skills in-house to prepare a cashflow projection plan. In difficult times, this ability is essential to the survival and prosperity of a business.
Our part-time Finance Directors can assist in managing business cash flow. Some of the key areas which we deal with are:
The Sales Cycle - Starting when the customer places an order, and finishing when the order is delivered AND paid for
Supplier payment - Pay suppliers to agreed terms and negotiate to make those terms work in your favour.
Stock control - Protect cash by improving systems and minimising stock levels. Buy only against customer orders if possible.
Cash Flow Forecasting Systems - Knowing how to manage your business cash flow in advance means you can take action to reduce the peaks.
Bank and Finance Facilities - The time to arrange bank facilities is when things are going well, not at times of crisis.
Monitor Business Profitability - Ensure you react quickly to a downturn in trading. Don't do nothing and hope that 'normality' will return.
Fund Raising - Identify requirements at an early stage to give time to prepare and present a positive business plan.
Treasury Management - Are you making the most of your surplus cash? How do you maximise the return?
The FD Group Cash Flow Pillar
Our cash flow pillar consists of 12 elements which we are happy to discuss with you at length during our FREE initial consultation. Why not book yours today?
- Forecasts
- Facilities
- Funds
- Treasury
- Overtrading
- Non P&L
- Stock control
- Credit control
- Financial ratios
- Invoicing
- Cost reduction
- Communication
Ready to talk?
If you want to strategic plan your road to success, then call our Finance Directors today on
0800 112 3375 or complete our contact form.
Join The FD Group
As demand for our part-time Finance Director service grows, we are actively recruiting new Finance Directors to join our successful team as Business Partners.
