Cash flow is one of the most important factors to consider when it comes to your business.
Maintaining a good cash flow will mean you can pay employees, rent and all other bills while still making your money back and breaking even.
This is vital for SMEs as it will make facing challenges within your business easier if you have managed your cash flow well.
Know your projections
By creating a cash flow forecast you can be prepared for any issues in advance. This will also allow you to make decisions based on these forecasts so it is important to keep them accurate and regularly updated.
Ensure that you factor in any price increases in the future and consider how your business might be affected by the seasons or the current economy. This will give you a more accurate overview of your cash flow.
Do regular reviews
Always review your finances so that you have the most accurate overview possible. You can update any assumptions that were inaccurate.
You should also make calculations within these reviews to factor in any unprecedented issues such as sales falling dramatically or having to replace tech as a one-off.
Find trends in the current market and adapt
You can help your cash flow by constantly adapting to new situations that affect your business.
If there is a current trend of increasing prices to match inflation then it is probably wise to consider adapting to that but also consider whether your customers will continue to pay more or if it is wiser to make other changes.
If you want to ensure your business has the best chance of long-term success, managing your cash flow and keeping an eye on it is highly recommended as it will allow you to be more prepared for difficult situations and manage your expectations.
Need help staying on top of your cash flow and producing cash flow forecasts? Please contact your usual Seymour Taylor representative or contact us at enquiries@stca.co.uk or 01494 552100.
This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at the time of publishing 10 October 2022.