The fine art of dealing with a cash flow crisis
Having a good understanding of cash flow and how to react in the event of a cash flow crisis is hugely important when attempting to keep your company running in an uncertain financial climate.
Many companies can find themselves struggling to maintain a healthy cash flow in the modern business climate, with many considering a major business restructuring of their processes.
This has resulted in a much greater demand for financial help and advice amongst such businesses, a demand that is being met by a number of sources.
With this in mind, we take a look at the best options for advice on cash flow when a company can find itself potentially struggling:
Looking to the past
Whether the actions taken in the past in an attempt to rectify cash flow problems were a success or not, they can tell you a lot about what may work with your current company. Learn from the lessons of the past and think carefully about how you can apply them in a contemporary context. However, it’s important to remember that not all businesses are the same and, consequently, solutions will have to be tailored to your precise situation.
Seek advice in the right places
There are a number of advisory organisations that can offer great advice on a wide range of financial matters, including issues with cash flow and corporate recovery. A number of these will do so for free. The National Council for Voluntary Organisations (NCVO), for example, has advice on cash flow crises that include case studies, the use of various forms of multimedia and utilises partnerships with charities to provide further help.
Keep up to date with the books
Finally, when it comes to a cash flow crisis, it’s vital that you have a good understanding of the company’s accounts and highlight where issues may arise before they actually do. A good accountant should be able to act as an effective forewarning system, giving you an early indication of any cash flow issues. This means that your relationship with those in charge of the books is vital to the success of the business and that they will often be one of the first sources of advice and information you go to when faced with a troublesome financial issue.