Coronavirus Legal Portal
Cashflow Projections & Budget Assistance
In these unprecedented times, many small and medium-sized businesses have reported significant problems with cash flow.
In addition to drawing on Government-backed financial support, there are a number of measures you can take, to manage your cash flow as effectively as possible.
Frequency of staff wages
Some industry sectors traditionally pay their employees weekly or fortnightly but this can have a negative impact on your business cash flow, particularly if your terms of business allow customers 30 days to pay. Regular late payers or clients who are themselves struggling with cash flow, can exacerbate the situation.
Consider turnover issues
Clearly, turnover will be important for your business, but you need to ensure that you do not fall into the trap of ‘over-trading’. Blindly chasing turnover can be risky because of the up-front costs you will inevitably incur. What happens if payments are not received until weeks or even months down the line? How will your cash flow be affected as a result?
No-one wants to turn away business in the current economic climate but you may wish to consider asking for advance payments to cover materials and supplies.
Equipment purchases and capital expenditure
Think carefully about committing to purchase any large pieces of equipment which could take a chunk out of your capital reserves.
If the equipment is necessary to keep your business going, consider a hire purchase agreement or bank loan so that you can offset the cost over a number of months or even years.
Take a good, hard look at your fixed overheads. Now might be the time to outsource your payroll and HR services to minimise the fixed costs of having in-house staff.
Freeing up funds in this way leads to leaner working practises so that your business can remain flexible with a focus on staying profitable.
Every business suffers the pain of late and slow paying customers. The Coronavirus crisis means that many more suppliers may default on their payments, leading to a knock-on effect for your business cash flow.
Now is the time to ensure that your credit control function is working efficiently. If you don’t have a dedicated in-house facility, you can outsource this business function in the short term to help your business ride the economic storm.
A good credit control system is reliant on your business issuing invoices without delay so that any lapses in adhering to terms of payment can be followed up as soon as they become due.
As a business owner, you will know that balancing the books and ensuring that your cash flow remains healthy, is critical to ensuring your business not only survives but, in the long term, thrives.
Contact us now for advice on the legal considerations involved in protecting you, your family and your business from the impact of coronavirus.
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“Winston Kan & Michael Stock of OGR Stock Denton LLP have been a great support throughout the process and Winston has demonstrated the highest levels of professionalism and genuine care throughout this difficult process. I highly recommend these lawyers, they are very attentive and honourable.” – Aziza
“All round brilliant team at OGR. After being badly let down by another solicitor, Priti Shah sorted our parents’ probates quickly and efficiently. She is very knowledgeable and on the ball and structured things in such a way she saved us lots of money. We also had conveyancing done by Ben Menaham which was smooth and hassle free and overseen by Michael Stock. Thank you.” – Monica
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“ We completed our home move in June, beating the Stamp Duty deadline by 4 days, and were extremely satisfied with the way the whole selling and buying process was handled by Robert Rosenberg. He was super efficient and communicated with us constantly throughout the process. We highly recommend him. and OHR Stock Denton, to anyone looking for a painless and stress-free experience. ” – Colin
“I would like to say a huge thank you to Winston Kan of OGR Stock Denton LLP for the outstanding work he did on my car accident case. He supported me and my family through the long and exhausting process. There were times when I was ready to give up but he patiently and supportively guided me all the way. All the best wishes from me and my family.” – Hana
“I owe you a great debt of gratitude for the kind, helpful, empathic way you dealt with me and went about your business at a time in my life when I was suffering huge emotional pain. I did not really understand what was happening to me but you did, and your advice was invaluable”. – Stephen Wiser
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