Did you know? - How to improve your working capital
17th December 2013
How to improve your working capital
Did you know?
One of the main difficulties for businesses is working out how to maintain access to cashflow. Despite having a healthy profit outlook, it is easy for debts to start mounting up if cash is not available at the time when your invoices need to be paid.
A cashflow shortage can quickly turn thriving businesses into struggling ones as suppliers withdraw or freeze their services, investors pull out, and court proceedings begin. It is reported that 90% of small business failures occur as a result of poor cash management so make sure you keep on top of your cashflow management.
Cashflow management – some advice
Ensure you always plan ahead. Draw up a realistic cashflow forecast to help you avoid any problems down the line. This forecast will help you to predict any vulnerabilities and plan for times when you might not have enough cash on hand to cover your outgoings.
When drawing up a cashflow plan it is important to factor in unexpected events. A good cashflow plan will take account of such possibilities and include appropriate contingency plans.
How to improve your cashflow
There are a number of ways you can improve your access to cashflow. Try following some of these simple strategies:
1. Make the payment process simple for your customers
2. Ensure credit terms are clear on all orders and invoices
3. Tackle late payment by enforcing penalties
4. Consider offering early payment incentives to ensure you always receive cash on time
5. Pay your own bills on the deadline, not before.
Have you made a cashflow management strategy?
If you have not yet put the above into practice and would like some more advice, Plus Accounting offers a team of experts who are on hand to help. Simply contact us and we will be happy to assist you.
Our latest workshop will cover all you need to know about ‘Raising Finance from Crowdfunding and the Banks’.
The session runs on Tuesday, 28 January 2014 from 08:00 to 11:30 (GMT) and will cover the following:
- How does the lending process work?
- What makes for a successful application for funding from a bank?
- What are the main reasons for rejection?
- Why use crowdfunding?
- How to navigate the crowd funding rollercoaster
- Hear about the potential pitfalls, advantages and how to achieve a successful result
Two leading industry experts will cover each session so make sure you attend if you want to learn more. For more event details.