Brought to you by Paul O’Donovan & Associates
Cash is like oxygen to a business and cash flow is a top priority. Good cash management is vital to avoid undermining a business’ short-term stability and its long-term survival. A company’s ability to continue is determined daily by the contents of the bank account rather than at the year-end by the financial statements. Keeping money in hand or readily available for both planned and unplanned events is not only prudent but also necessary in unsettled times.
Without the ability to meet the day-to-day demands from its suppliers for payment, a business may well find itself cut off from its essential inputs and face serious cash flow issues. Business essential cost items such as trade goods, raw materials, employees and services such as light and heat all need to be covered to keep the business going. Keeping a tight rein on cash flow is important even at the best of times. See our tips below on how you can manage your cash flow.
Tips for Managing Cashflow
| • | Businesses need to prepare regular and accurate management accounts and cash flow projections on a timely basis. |
| • | Improve debtor management and ensure credit control procedures are working properly.
Customers will often pay those who shout the loudest, so if necessary, make sure this is you. |
| • | Send out invoices on a regular basis and where possible agree the invoice amount in advance. One of the most common delays to an invoice being paid is a query over the invoice. |
| • | Shop around for better credit options. |
| • | Switch suppliers if necessary. |
| • | Introduce cost control procedures. |
| • | Change purchasing and stock arrangements. |
| • | Review internal policies such as expenses and travel policy. |
| • | Negotiate rent reduction with landlords. Obtain a valuation from a qualified valuer, if necessary, to back up a rent reduction. |
| • | Reduce overtime. |
| • | Invest in technology to achieve efficiencies. |
| • | Spread Revenue Commissioner debts evenly over the year by setting up payments on a monthly direct debit basis. |
| • | Review and scale back of non-essential activities. |
| • | Increase overdraft facilities. |
| • | Examine the invoice discounting option. |
Taking appropriate actions for your business regarding cash flow will help you manage your cash and will keep you in a much stronger position for the future.
We can provide you with expert advice on any of the above points. We provide numerous services which can dramatically help you manage your cash flow such as:
- Preparation of management accounts.
- Preparation of cash flows and projections.
- Preparation of strategic budgets for the future.
- Detailed analysis of actual results versus projections.
- Detailed analytical review of overhead costs.
- Dealing with financial institutions on your behalf.
- Loan and overdraft applications.
- Dealing with and negotiating with the Revenue Commissioners and arranging instalment arrangements and direct debit payments on your behalf.
Please call us on 021-4321799 or email info@paulodonovan.ie for confidential advice.
