How to manage cashflow in your business

During what would normally be the busiest period of the year for businesses in retail, hospitality and other sectors, many will now be keeping a close eye on their cashflow as they deal with the impacts of COVID-19.

While Government-backed schemes like furlough, grants and loans will provide some much-needed support, there could be additional disruption to contend with as the UK reaches the end of its transition period with the EU and new rules take effect from 1 January 2021.

Even before the pandemic, cashflow problems were among the main causes of business failure.

To avoid running out of money and prepare yourself for financial shocks, it’s essential to monitor the way your business’s cashflow looks now, and forecast how it might look in the future.

This will help you to create a positive cashflow, putting your business in a more stable position.

For businesses that struggle to keep up a consistent inflow of cash, late payments are often the main offender. Tightening up your invoicing processes can help.

On a similar note, you may be able to negotiate favourable payment terms with your own suppliers to ease the pressure on your business.

Another approach that many will have already taken this year is to cut down on your spending where possible. Look for unnecessary costs, assess your stock levels.

Finally, planning can make a big difference to your tax liability, so make sure you use any reliefs or allowances that apply to you.

This is something we can help you with, as well as keeping you up to date on Government support schemes and helping you to access any grants or loans you’re eligible for.

We can help you monitor and manage cashflow.

For further advice or information contact Nigel Clemit, at accountants and business advisers JWP Creers LLP in York by phoning 01904 717260.