What cash flow problems a business might experience?
Common cash flow problems for businesses in the UK would include:
- Lack of cash on hand/reserved
- Quick accumulation of debts
- Overheads are higher than initially thought
- Clients/customers not paying invoices on time
- Bad debt
- Falling behind on payments, especially tax for HMRC
These are just some of the most notable. Most businesses will have specific cash flow issues unique to their situation, and that typically requires someone like ourselves to come on board and provide assistance.
How can businesses improve cash flow?
If it was as simple as going to the bank and asking for money, everyone would immediately solve their cash problems while simultaneously creating new ones. How your business tackles these issues will depend on a number of factors like the size of your business and the industry you operate in.
Typically, improving cash flow starts with a full audit of finances, especially if cash flow problems are more of a regular occurrence than a surprise. An advisor or accountant will want to cast a keen eye over finances to see where immediate and long-term solutions lie. They will never enact changes, but will simply showcase where those opportunities lie.