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Financial Stress: A Guide to Mastering Cash Flow

We understand that running a business isn't always smooth sailing. We're here to offer our support and expertise, especially during times of financial stress. Cash flow is the lifeblood of any business, and without it, survival can become quite challenging. Let's explore some key insights and strategies to help you navigate these rough waters successfully:

1. Start with the numbers

Your starting point should be understanding your numbers. Simple and honest it’s the first crucial step to gain a thorough understanding of your business's current financial position. By doing so, you'll pinpoint the specific challenges your business is facing and come up with targeted solutions.

If you don’t feel confident we can run these numbers for you and take time with you to identify the key issues.

2. You Need to Understand Your Key Cash Flow Drivers To effectively manage your cash flow, you must first understand what drives it. These drivers can vary from business to business but often include factors like sales volume, payment terms, inventory management, and overhead costs. Our team can work with you to identify these key drivers and devise strategies to optimise and improve them. Taking action is the key.

3. Managing Cash Flow Is All About Your Business Processes

Managing cash flow is not just about numbers; it's about optimising your business processes. From invoicing and payment collection such as improving your cash conversion cycle to the inventory management and expense control, every aspect of your operations affects cash flow.

Do you know how to calculate you cash conversion cycle?

Do you know the impact that improving your Cash Conversion Cycle by 15 days will have on your cashflow?

By running these numbers and working towards improving this you make improvements to your cashflow more quickly.

4. Fixing the Underlying Causes of Poor Cashflow

While it might be tempting to focus solely on the immediate symptoms of poor cash flow, such as late payments or outstanding invoices, it's crucial to tackle the underlying issues. By doing so, you can build a strong foundation for sustainable financial health and avoid repeated cash flow crises. Taking a good look at the numbers, the business expenses and areas of focus identified in step one you'll begin to see a difference and a sustained improvement.

We take immense pride in being more than just number-crunchers. We are your partners in success, especially during challenging times. If you want to proactively improve your cash flow management, don't hesitate to reach out to us on 07 578 5416.

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