Overcoming small business cash flow management issues
With late payments and economic uncertainty dominating news headlines, small business owners need to be even more watchful over their finances.
The downfall of Carillion and several other high profile insolvency cases showcase the finance issues that can be faced by subcontractors and smaller firms.
Insolvency will often have a knock on effect further down the supply chain, resulting in financial losses and even putting business survival in doubt.
Managing cash flow becomes key, as it ensures that there is sufficient financial capital available to overcome any unforeseen expenditure or changes in the business climate.
A business will often stagnate without efficient financial management, as it is not possible to focus on research, development or sales, while in extreme circumstances a business may not even be able to meet its financial obligations.
A range of alternative finance solutions do exist to support businesses looking to grow or to consolidate their position, on top of the traditional finance options available via banks.
Businesses may also want to consider their credit options, as there are a number of credit card offers that may provide a short term solution.
Other businesses are staving off the threat of insolvency by considering invoice finance - this is particularly prevalent among those dealing with late payments from clients.
Businesses facing financial difficulties should seek appropriate advice from corporate insolvency practitioners, as there might be solutions that they have not previously considered.
Capable of providing support on everything from refinancing facilities to sourcing finance, overcoming cash flow issues, and managing working capital, businesses should find an outcome that works for them.
Another option is to develop contingency plans to ensure that a range of strategies exist should a business find itself facing difficult times.
Plans can be developed using expert advice, so that even if one strategy proves to no longer be attainable, another can be followed in its place.
By Phil Smith