Cash is King! Cashflow is the lifeblood of any and every business and a lack of cash to pay bills as they fall due has crashed many a seemingly profitable, successful business. 

A business needs to plan and monitor its cashflow and the timings of those cashflows to ensure it can meet its obligations. Whilst large, headline grabbing, and seemingly profitable deals and projects can look great on 

paper, the fine detail on payment terms, upfront costs and release of funds may have a considerable negative impact on the cashflow. 

If these terms are understood, modelled and acceptable to the business, then great, but many businesses take on deals that turn out to be a cashflow nightmare and often do not even end up profitable, despite the original headline numbers. Just ask all those suppliers who worked with the likes of Carillion and had huge unpaid invoices and payment terms into the hundreds of days! Having the right amount of funding is also key and the availability of funding as and when required to allow the business to react to opportunities to grow. 

The business finance market is now so much larger than just the high street banks and there are hundreds of players out there offering more bespoke funding solutions to suit any business need. This market beyond the banks, the ‘Alternative Finance Market’ is a market we are experts in and have access to over 600 debt and equity funders who support the business finance market. 

Some tips we recommend for managing cashflow and funding include: 

– Forecast and monitor short/medium term cashflow. 

– Model different scenarios; if X, Y and Z happens or Y company does not pay. 

– Consider the impact of any sizeable deals on the cashflow of the business. 

– Keep on top of payment terms – chase early and continue to chase until paid. 

– Have policies to cover actions to be taken if customers are late or not paying. 

– Create cash and/or funding headroom – have a plan B for funding. 

– Consider different options to raise the right sort of finance you need. 

– Use advisors who are experts in the market, i.e. us!