Common Causes of Cash Flow Issues in Business
Often, businesses speak to us because they have cash flow problems and are struggling to implement a fix as Management are firefighting day-to-day challenges. (In the current climate with coronavirus, businesses may be experiencing extreme cash flow challenges.)
Common causes of cash flow problems include:
Loss of contract or customer
High overhead costs such as rent and business rates which can put a strain on cash flow
Slow payment by debtors can cause problems within the business in paying its own creditors and employees
Overstock of products due to poor stock management
Bad debts
Pressure on profit margins
How do I fix cash flow problems?
Positive cash flow is vital to the success of your business. Whilst fixing the immediate problem, it is also important to implement longer-term changes to stop this from happening again. Whilst each case should be individually considered, there are a number of options you can consider to fix your cash flow challenge:
- Speak to supplier and negotiate payment terms
- Reduce the cost of your payroll
- Sell assets and any excess inventory you don’t need
- Consider closing down divisions of your business that are loss-making
- Refinance on better terms
Let’s Talk
It’s important to speak to people who can help as early as possible. We have experienced teams who can help you and work with you to achieve the best outcomes for you and your business. For a no-obligatory chat, complete the form opposite, include a best time for us to call you and a Partner will be in touch.
Alternatively, book a convenient time for us to contact you