Help for start up businesses
Helping businesses get off the ground in Gloucestershire with a new website and online marketing is what Quay Websites is all about. However its not just a flashy website and clever marketing that will make your business a success, its also how clever you are with Cashflow!
We just received an interest newsletter from HSBC explaining how cashflow is the life blood of your company. Here are a few snippets ...
How do small businesses get into cash flow difficulties?
“There are many reasons – spending too much, not charging enough, not credit-checking customers, granting overly generous credit terms, not getting invoices out promptly or chasing payment when due, continuing to supply customers that already owe money, too many customers not paying on time. All of these impact cash flow.”
What are the golden rules of effective cash flow management?
“Control your costs and don’t spend beyond your means. Maximise your sales and prices. Get your invoices out promptly and chase when due – your credit control measures must be robust. Credit-check new customers. Calculate your cash break-even so you know how much cash you need to get in to sustain your business each month. Make cash flow forecasts based on accurate figures and realistic assumptions. Reconcile your forecasts to actual bank statements, investigate any differences and adjust your forecasts accordingly.”
How can invoice factoring help with cash flow issues?
“Subject to approval and the value of the unpaid invoice(s) being of worthwhile value, invoice factoring is where a bank or other provider buys the debt from you for a percentage of the amount due, say, 80 per cent. They collect payment when due and pay you the balance, less their fees. You get cash much earlier, which, for a fee, can ease cash flow.”
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