3 Ways to Improve Your Cash Flow
Having a steady cash flow is one of the most fundamental necessities of any business. You must have more money coming in than going out. Seems obvious doesn’t it? If you are spending cash and not making any you will eventually run out. There are many businesses however who do not work to this principal and it is no surprise that they find themselves in bother. Having a cash flow problem is bad, but even worse is having one and doing nothing about it.
What causes cash flow problems?
Cash flow problems can occur for a number of reasons:
Spending more than your are charging
Too much stock
Changes in the business
Growing too fast – over-trading (Yes this can be a problem!)
No matter what the problem the result if no measures are taken is the same, your business will cease to exist. The way in which you deal with the problem will ultimately decide the fate of your business. So what can you do to turn the fortunes of your business around before it’s too late?
3 Ways to Improve Your Business Cash Flow
As mentioned above there are a number of ways in which you can find yourself in this predicament and every business is different but below we have outlined 3 tips for improving the cash flow of your business.
1. Analyse and plan– The first step to improved cash flow is to take a step back and analyse your current situation. No matter how big or small your business is you should know where your money is being made and spent. After gaining a better understanding of your current situation you can put together an informed forecast to keep you on track. Remember by failing to prepare you are preparing to fail!
2. Improve collection systems – The good old days of economic prosperity and additional days of grace have passed us by and those still living by these principals are often the ones who find themselves struggling with cash flow problems. Set collections activity (every 30, 60 or 90 days) in place to ensure bills are paid and ensure they are being enforced.
3. Debt Restructuring – If you are really struggling with debt and financial distress you can look at restructuring your debt with your bank. With the assistance of an expert solicitor debt restructuring can see you re-negotiate or even refinance your debt. Our banking and finance experts at MKB Law Financial have years of experience in difficult bank negotiations and have even helped clients avoid the insolvency process outright.
If you are having problems with cash flow in your business or would like to discuss the possibility of restructuring your debt with the help of an expert speak to MKB Law Financial today.
Call: 028 9024 2450