Cashflow projections and budget assistance

In these unprecedented times, many small and medium-sized businesses have reported significant problems with cash flow.

In addition to drawing on Government-backed financial support, there are a number of measures you can take, to manage you cash flow as effectively as possible.

Frequency of staff wages

Some industry sectors traditionally pay their employees weekly or fortnightly but this can have a negative impact on your business cash flow, particularly if your terms of business allow customers 30 days to pay. Regular late payers or clients who are themselves struggling with cash flow, can exacerbate the situation.

Consider turnover issues

Clearly, turnover will be important for your business, but you need to ensure that you do not fall into the trap of ‘over-trading’.  Blindly chasing turnover can be risky because of the up-front costs you will inevitably incur. What happens if payments are not received until weeks or even months down the line? How will your cash flow be affected as a result? Also is your pricing model up to date, as you need to focus on the bottom line – profit margin and not just the top line – sales.

No-one wants to turn away business in the current economic climate but you may wish to consider asking for advance payments to cover materials and supplies.

Equipment purchases and capital expenditure

Think carefully about committing to purchase any large pieces of equipment which could take a chunk out of your capital reserves.

If the equipment is necessary to keep your business going, consider a hire purchase agreement or bank loan so that you can offset the cost over a number of months or even years.


Now is a good time to review your fixed overheads and may be look at the cost benefits of keeping certain services in house or if they could be outsourced e.g. payroll. With more employees geared up for working from home, it may be that the business can have reduced office space, is your rent agreement coming up to a break point?

Freeing up funds in this way leads to leaner working practises so that your business can remain flexible with a focus on staying profitable.

Credit control

Every business suffers the pain of late and slow paying customers. The coronavirus crisis means that many more customers may default on their payments, leading to a knock-on effect for your business cash flow.

Now is the time to ensure that your credit control function is working efficiently. If you don’t have a dedicated in-house facility, you can outsource this business function in the short term to help your business ride the economic storm, to keep the funds flowing into your business.

A good credit control system is reliant on your business issuing invoices without delay so that any lapses in adhering to terms of payment can be followed up as soon as they become due.

As a business owner, you will know that balancing the books and ensuring that your cash flow remains healthy, is critical to ensuring your business not only survives but, in the long term, thrives.

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