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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