Let’s be honest, 2020 hasn’t been the easiest of years. Especially for small businesses looking to grow. With COVID-19 massively impacting our economic situation, it’s unlikely your business plans have run according plan. While your initial plans may have fallen short, the key to recovery is making use of support available, and we’re here to guide you through what’s possible.
In this article, we’ve put together a list of useful recovery tips in order to help your small business get back on track.
Understand your cash flow forecasts
The first step to recovery is understanding your cash flow. It’s critical you take time to work out precisely what your business outgoings are during this time, and ensuring you have a realistic idea about the level of sales you can expect. Once you have this information, the ability to predict and therefore counteract any cash flow problems becomes a whole lot easier.
During these uncertain times, being aware of anything that lies ahead is key. Planning will enable you to keep your cash flow steady, giving you the power to accurately forecast and grow your business.
As a small business, understanding your cash flow is crucial. So, to help you achieve a positive cash flow, we've created the guide to small business cash flow. In this guide, we highlight why cash flow is important for small businesses, explore the biggest cash flow mistakes and how you can avoid them.
Expect slower payments than usual
Most businesses are in the same boat - you won’t be the only one trying to revive your cash flow. You need to understand customer payments could slow down. When forecasting, don’t base your projections on customer payment times before the COVID-19 pandemic. Allow for some inconsistencies in payment times and you’ll receive fewer unwanted surprises. In short, you need to be aware of your customers situation as well as your own.
Having said that, if slow client payments are causing you real cash flow problems, consider invoice financing. This is a relatively cheap way to deal with slow payments, allowing you to borrow the value of an outstanding invoice for a small fee.
Available funding to manage cash flow
Once you’ve understood and addressed any potential changes to your cash flow, it’s a good idea to explore any available lines of credit you may be eligible for. This could include bank loans and credit cards, as well as a range of new government measures that support small businesses.
There are several financial support schemes you can apply for, including coronavirus bounce back loans and business rates relief. What you can apply for depends on your business’s circumstances. So, make yourself familiar with the options at hand, find out what you’ll need in order to apply for any scheme or loan, and complete this ahead of when you need it.
HL&W – small business accountants
At HL&W, we provide specialist accounting services to help small businesses grow. Our services are tailored to your needs as we work closely alongside you to really make a difference. Our expert team of accountants can guide you through your COVID-19 recovery, helping you stay on top of your cash flow, recommending government support schemes and lots more. Our financial services are not only aimed at saving costs but identifying future risks - and tackling them head on to ensure a smooth business venture.
Contact us at HL&W today and we’ll let you know how we can drive your business forward.