8 top tips on how to improve your cashflow

Published: 08/01/2019 By Katie Kellaway

It is not unusual for companies to experience cash flow issues. This is something we come across and provide advice on frequently.

Below are our 8 top tips for improving your company’s cash flow:

1. Keep an eye on your cash flow position -  Ensure you have an up to date cash flow forecast to help identify potential areas where a lack of cash may become an issue. Plan ahead and don’t forget to add an element of contingency into your budget for any unexpected costs.  

2. Boost your income – Depending on your situation, increasing income may be easier than cutting back on costs. Increase your prices. Up-sell and cross-sell. Offer volume or frequent buyer discounts.

3. Cut business expenses – Reduce overheads such as staff costs. Cut any non-essential costs. Renegotiate the terms of your lease or move. Sell any assets that are not vital to the business.  Stick to budgets.

4. Cut stocks – Can you order less stock and sell stock discounted for cash?
5. Negotiate with your suppliers – Think outside of the box. Lengthen payment terms. Consider a time to pay arrangement, particularly if you owe a significant amount of debt to HM Revenue and Customs. Consider if you can source supplies elsewhere at a reduced cost. Consider an informal arrangement or even a Company Voluntary Arrangement (CVA). Good communication is key when dealing with your suppliers.

6. Reduce the credit period offered to customers. Consider offering a financial incentive to customers for prompt payment. Consider ways of making payment methods easier for customers. Stay on top of credit control.

7. Reduce or delay expansion plans – A lot of cash flow problems occur when a business is expanding. Consider delaying any expansion plans to conserve cash in the short-term. 

8. Refinance your debt – Asset Based Lending can support you to grow your business by unlocking cash tied up in your assets. You can increase your working capital by raising funds using your existing assets (i.e. debtors, plant and machinery and property) as security. Approach your current financial services provider as they may be willing to offer you a short term loan. Consider using the new fintech lenders. 

If you do not take action to address your cash flow issues, creditors may initiate court action and may end up issuing a winding up petition. At TBA, we have the skills and expertise to advise you on any financial issues you may be experiencing. Please do not hesitate to contact us on 0208 661 7878 for some free advice. Early advice is always best and can be the difference between survival and damage limitation.

At TBA Finance, we also help clients to sustain and / or grow their business by raising / structuring their working capital facilities and advise on a full range of bank, asset finance, factoring and invoice discounting options so if you are looking to refinance, please feel free to get in touch.