Cash Flow in Business: How Opus Business Rescue can help you
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Our dedicated team is on hand to provide assistance to Directors of companies in financial difficulties. When a company is insolvent, a Director has a duty to minimise losses to stakeholders. Our senior management are available to talk to you about the problems you and your company face with complete confidentiality.
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
Resources & Guidance
HMRC petitions and debt recovery: What directors need to know
Business owners are facing a deluge of financial and operational pressures at the moment. From inflation to supply chain disruption ...
What does HMRC having recovery powers mean for Directors?
While company directors are generally protected by limited liability, recovery powers granted to HMRC in the Finance Act 2020 ...
What is the CVL process and when should it be considered?
This article provides a short guide about the CVL (Creditors’ Voluntary Liquidation) process and when should it be considered ...
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