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Cashflow

Most companies will face some kind of cash flow problem at some point. Temporary cash flow problems or financial squeezes usually arise out of matters that are outside of the immediate control of the directors, but when problems like this happen it’s vital you take the right steps and move quickly to ensure the issue doesn’t escalate.

To help you navigate safely through troubled financial waters, we’ve asked Richard Saville of Corporate Financial Services to set out the 10 key steps you need to consider when your business is faced with a financial problem. Continue…

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When you are launching a new business, it’s fair to say that planning your finances isn’t the most exciting aspect of of being a startup. However, it is a crucial part of understanding whether your business has a chance of succeeding

And the good news is that there are now dedicated software, tools and apps that can quickly and easily produce financial forecasts for you.

So to help you understand more about how planning your finances can help your startup succeed, we asked Robin Booth of Brixx.com to share her experience with us;

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The purpose of putting a company into administration is one that’s widely misunderstood by business owners. So to help de-mystify what’s involved and what it entails; here’s a guide to the company administration process; Continue…

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Dealing with late payment can be tricky for small and medium sized businesses. Handle it wrong and a customer could be lost, ignore the issue and it can stifle business growth, have a huge impact on cash flow and even cause a company to go bust.

Staggering figures published in a government paper in May, revealed that small businesses spend around 130 hours a year chasing late payments, equating to an average cost of £1,500 per business.

The problem is endemic with two thirds of SMEs suffering according to research by the IOD, but follow this 12-Step plan and you’ll be able to minimise the damage late payment causes.

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Starting up and sustaining a company is a tough challenge for even the most gifted of entrepreneurs or the brains behind the business world’s biggest and best ideas. Within that context, the margins for error tend to be slim, particularly when it comes to financial matters and the business of balancing your books.

Here are some of the best options potentially available to you if your company is facing a financial squeeze and is running out of cash, along with some ideas on how to approach the turnaround process.
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When you are starting a new business, you will most likely need to produce a cashflow forecast.

If you’re looking to raise money, from either a bank loan or outside investors, a cash flow will be one of the financial forecasts that you will need to produce for prospective lenders and investors.

As your business grows, a cash flow forecast becomes an increasingly important tool to help you manage the business and to avoid any sudden cash flow problems.

We all therefore appreciate the importance of a cash flow forecast, but are there any trade secrets to doing it better?

Here are some top tips to help you produce a better, more accurate cash flow forecast first time, and how you can use it to give your business a commercial advantage.
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Although it does not necessarily herald the end of a small business, decline into insolvency can bring significant changes in company structure, operations and management style.

It’s worth checking your company for characteristic signs that, if spotted and acted upon early enough, could help you to steer the business away from danger.

Here are 8 early warning signs that indicate your small business could be heading for financial trouble, and the actions you can take to overcome them. Continue…

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With late payment problems a constant burden for small business owners, we look at the most common delaying tactics used by customers, and how you can overcome these late payment excuses.
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If there’s one piece of advice to hold above all others while running your business, it’s this: cash is king.

It doesn’t matter how much you are selling or the size of your profit, if your business doesn’t have enough cash to pay staff and suppliers you are in big trouble.

Even successful and profitable businesses can be struck by cash flow problems because as they grow, more working capital is tied up in the business.

Without proper cash flow planning good businesses can suddenly find they don’t have enough money to buy resources to fulfil the orders coming in.
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Cash is the lifeblood of any business. And in the first few years of your start-up, the ability to get cash into your bank account faster than it goes out again will be one of the main measures of whether it is a viable business.

Every year, many small businesses fail, simply because they run out of cash. Even profitable businesses can be brought down by cash flow problems caused by slow-paying customers.

Without clear credit control procedures to ensure your customers pay you promptly, your business won’t be able to grow and could jeopardise your ability to pay your own bills in a timely manner. That’s the start of a slippery slope that can end in the destruction of years of hard work.

Don’t let your business die this way. Here’s how to build good credit control procedures into your operations from day one, with ByteStart’s seven ways to make sure your customers pay you on time, every time. Continue…

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While it may be tempting to ignore a mounting debt problem in your business, it is the worst thing you could do.

If your business is a limited company, there are many avenues open to you to resolve debt-related problems. So, where do you start?
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If your customers do not pay you on time (or at all), then they are inflicting serious damage to your business.

It is something that is so often overlooked as ‘one of those things’ small businesses just have to put up with, but with the right approach you needn’t let your business succumb to this common problem.
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The single biggest cause of small business failure in the UK is poor cash flow management, most often brought on by late payment issues. It’s therefore vitally important that you do all you can to ensure that your customers pay you on time.

Here are 7 things a small or start-up business (or any organisation for that matter) can do to ensure that late payment issues do not threaten the viability of their operation:
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Credit limit application forms are a useful way of finding out the financial capabilities of a new client or customer, before you agree to provide them with any form of credit.
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Invoice finance and factoring are two terms you may have heard thrown around in relation to business finances – but what exactly are they?

Well, they’re not quite a loan, but they are a source of funding – and they’re secured against your outstanding, unpaid client invoices, so you might prefer to think of them as a kind of secured loan.

At their most basic, both methods allow you to unlock the value of your unpaid invoices, closing the gap between the invoice date and the due date – for a fee, of course! Continue…

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If you’re doing well enough that your business is growing rapidly you would expect your finances to be healthy. But that isn’t always the case.

If your firm is expanding quickly, you could find that your cash flow becomes a problem, even though your business is profitable.

It’s a unique financial situation where you are selling so much that you can’t get the money in the door fast enough to pay for the raw materials you need for your next batch of products.
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One of the big issues when you’re taking on a new client is whether you can trust them to pay you or not – so how best do you deal with this concern?

Some people charge a deposit or part-payment upfront, but that can be off-putting to customers, who equally don’t know whether you’re trustworthy and might decide to go with a freelancer who doesn’t ask for payment upfront.
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If you’ve got a business headache right now, there’s a pretty good chance it’s to do with clients owing you money.

It’s almost as if the economic downturn has become a prime opportunity for anyone who fancies improving their own cash flow to help themselves to better credit terms from their suppliers… but without asking permission.

That has a knock on effect right down the line. And it’s no wonder that small, cash poor companies at the bottom of the chain are the ones that suffer the most.
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Often when you see adverts for loans – particularly debt consolidation loans – you’ll hear them speak of ‘CCJs’ as something that might have prevented you from being approved for a loan elsewhere.

CCJs are County Court Judgements, and are a legal process designed to resolve issues such as non-payment by taking your client to court.
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A recent survey shows, once again, that late paying customers remain the biggest single threat to the health of the UK’s small businesses. Here, we provide some tips on how to avoid late payment problems.
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5 ways to instantly improve your cash flow

February 8, 2012

Cash flow is the most important thing in your business – more important even than profit. If you imagine cash to be the blood cells of a business, then cash flow is the flow of blood, keeping the business alive. A healthy person will quickly die without blood. And a healthy profitable business will quickly […]

Late payment debt recovery service for ByteStart visitors

October 8, 2011

As late payment problems consider to plague small businesses, we have teamed up with a leading debt recovery service to ensure ByteStart visitors can receive help getting their invoices paid.

Tips for avoiding late payment problems during the downturn

October 8, 2011

Now we are in the middle of an economic downturn, one of the most important things small companies should do is to keep a firm control on their cash flow.

How factoring can free up your business cashflow

October 8, 2011

The lifeblood of any business is cash. You need good cash flow to keep your business viable. In some ways it’s more important than turning a profit – it’s not unheard of for profitable businesses to go under, just because they ran out of cash.

How to manage your cashflow and grow your business via invoice financing

October 8, 2011

Good cashflow management should be one of the most important priorities for businesses of any size. As has been so brutally demonstrated in recent months, it is possible for perfectly solvent companies to become unsustainable if cashflow becomes a problem.

Ensure business success by developing good money habits

October 8, 2011

Whatever your business does, the purpose of it is simple: to do it at a profit. That’s the whole point of business. Even if you run a not-for-profit organisation, you still need to make a profit to reinvest (or at the very least break even). So how do you make a profit from your business?

Guide to successful risk assessment and credit management of new customers

October 8, 2011

If a stranger walked up to you and asked to borrow £100 on the spot with a promise that you would be paid back in 30 days, would you oblige? Thought not! What about repayment and the implications if it failed to materialise? Despite these obvious risks, many firms are expected to do business this […]

6 things you can do to help make sure your small business survives a recession

October 8, 2011

With the UK in a period of prolonged recession or very low growth, and with the credit crunch affecting the economy, conditions are very difficult for a large number of small businesses. The realities of a recession means that consumer spending is weaker and therefore any service provider, retail outlet or manufacturer that is reliant […]

How to speed up late payers and when to use a debt collection agency to tackle the worst culprits

October 8, 2011

Sadly, there is a real culture of late payments in the UK. For business to business transactions, most firms automatically expect 30 days credit. In fact, if you don’t agree different terms, the law says businesses can take 30 days to pay by default. If you find yourself lucky enough to be supplying very big […]

Invoice discounting – a small business guide

October 8, 2011

Unless you’ve got mortgage-free commercial premises or machinery, the biggest asset in your business is probably its sales ledger. Its value shouldn’t be under-estimated. The money your business will bring in each month is a valuable tool that can be used to make business life easier.