Cashflow is the very lifeblood of your business, if it runs low a business will struggle to continue. If it runs out it will cause a corporate “heart attack” and kill even a profitable business stone dead.
So what can you do to minimise the impact on your business when you are faced with a short term cashflow problem?
In part 8 of the excellent Managing Cashflow series from the ICM & BIS they cover this problem with some simple and practical advice.
The guide covers everything from simply talking to your suppliers to explain the difficulties to ensuring your own customers are meeting their financial obligations, the guide has some simple but effective advice on how to manage what can be a critical situation.
You can download the guide direct below:
Our resident Credit Management expert Adam Home has the following advice for any business experiencing a cashflow shortage:
“Any business experiencing cashflow shortages should take immediate steps to alleviate or limit the situation, or it runs the risk of circumstances spiralling out of control.
As suggested in the guide you need to speak to your own suppliers if you will be forced to delay payments, preferably before any amount is due. As well as seeking outside sources of temporary funding to plug the hole in the short term.
If you don’t already generate cashflow forecasts, now is the time to start. Make sure you have an accurate idea of when money is expected in and how much you can afford to pay your creditors.”
The Managing Cashflow series of guides is produced by the Institute of Credit Management in association with the Department for Business Innovation and Skills. The full series of guides are available on the blog here.