Keeping an Eye on Your Cash Flow

Cash is the lifeblood of a business, but with so much emphasis usually put on profitability, it can be easy to overlook this fact. Of course, the bottom line is important, but poor cash flow management can drive a profitable company out of business, especially when the economy is struggling.

The risk is especially great for expanding companies. For example, if billing is delayed at the same time as stock is accumulated to fulfil increased orders, you can find yourself short of the cash needed to pay suppliers and employees.

The benefits of projection

Cash flow projections are critical, especially in times of need, but you don’t have to wait for a crisis to benefit from good cash flow planning. A properly developed cash flow projection can help a business foresee and prepare for potentialshortages. Cash flow management can also help you:

Maintain adequate cash reserves to pay accounts, expand the business and invest in facilities and product development
Reduce interest costs through managed borrowing
Increase interest income by transferring surplus funds into interest-bearing accounts
Receive discounts through bulk purchasing
Improve relations with the bank manager

Businesses that prepare cash flow projections often learn something about their systems, and the process often has some positive side-effects. For example, you might discover that you need to pay more attention to certain customers, or that you can time payments to suppliers more beneficially.

You can find a checklist and some ideas for getting started on a cashflow projection inside, but make sure you call us if you want help in moving your business forward.

Helping you and your business

We can help with many areas of your business and personal finances. Why not call us now and we’ll arrange a meeting to discuss:

Preparing cash-flow forecasts
Improving your business profitability
All-round strategies for minimising your business tax burden
Protecting your business from financial disaster
Raising finance and maximising the value of your business
Timing transactions to reduce the tax bill
Maximising wealth within the family using your annual exemptions and tax breaks
Retirement planning strategies for you, other family members and your business
Making ends meet in retirement
Exit strategies and estate planning, for a secure future

Putting together a plan and putting that plan into practice will ensure a clear financial future for yourself, your family and your business. Why not call us now?