Don’t get swept away by troubled cashflows
Good cashflow control, avoiding restrictions or delays, is the key to such strategic objectives, particularly for younger businesses or SMEs without 'deep pockets'.
Often a few straightforward cash-related tactics will help to cure troubled cashflows:
- Identify your critical financial constraints and measure them constantly.
- Establish strict credit control. Set out your terms and conditions and stick to them. Set up easy payment plans for struggling customers but don't let them exceed their limit.
- Produce monthly accounts so you can monitor your performance and review the cashflow. Adjust overheads – don't lose last month's gains through this month's losses.
- Never allow one customer to dominate your turnover. Spread your risk by developing more customers. Treat them all as equally important.
- Get your staff behind any cost-cutting exercise. They'll know where the wastage is, but maybe not how serious the need is to make cost savings. Tell them.
- Keep in contact with your bank and investors; make sure they are aware of your concerns and your successes.
And perhaps an obvious one…
- Seek our detailed professional advice to ease your cashflow decisions.
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