Most successful business owners agree that in times of trouble cash is king.
Cash acts as a backstop to help you out in periods of difficult trading conditions.
There are many ways you can improve cash flow, some of which are discussed here.
1. If you are registered for VAT you could use a cash accounting scheme if eligible. This scheme determines your VAT liability based on monies received and paid rather than sales and purchases invoiced. Why pay VAT if it is tied up in debtors: money owed to you?
2. How many days credit are you giving to your customers? Bad payers can quickly become bad debts if economic activity slows down. If customers are bad payers, what they are doing is using your money to keep their cashflow under control. There may be good reasons for you to offer extended credit terms but you need to be aware of the negative cash flow this causes for your business and take action to enforce credit terms before late payers cause you a serious cash flow problem.
3. You could release working capital from any obsolete or slow moving stock by offering it for sale to customers at reduced prices.
Every business has different opportunities available to manage it's cash flow. We can help with accounting support to help you keep on track.
Please get in touch if you would like to discuss your options.