Cashflow

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 die if it runs out of cash.
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There are several different measurements that will provide you with insights into the health of your business. Profit is certainly one of them. However, even the world’s most profitable enterprises can experience financial difficulty if they ignore their cash flow. (more…)

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 current economic shutdown (late 2020) 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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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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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 way.
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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.
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Invoice finance is an umbrella term for two distinct forms of business funding called invoice discounting and invoice factoring.

It’s likely you’ll have heard of these alternative types of business finance before, but without knowing exactly how they work, you might dismiss them as just another financial product that you and your business don’t need. However, there are real benefits to these products, so here is what every business owner should know about invoice finance. (more…)

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 up front, 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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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.
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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.
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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.
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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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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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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.
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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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Although it does not necessarily herald the end of a small business, the decline into insolvency can bring significant changes in company structure, operations and management style.

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. (more…)

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.
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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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