Look after your cash flow and it will look after your business
More so now than ever, cash is extremely important to the success of your business. As we slowly come out of COVID 19, it will be vital to make sure you are making the most of your cash reserves, support loans and managing your working capital, to ensure that the business continues to survive the coming weeks and months.
Some tips to improve your cash flow:
Speed up receipt of income to your business
- You should make it as easy as possible for your customers to pay, regardless of the industry you operate in.
- Make sure you are sending out invoices as soon as possible and be sure to follow them up on a regular basis.
- You want to speed up payments by opting for payment methods, such as online payments, where the money will clear quicker than if you allow customers to pay by cheque for example.
- If it is appropriate to the nature of your business, you could take upfront deposits or collect payment at intervals if you were working on an on-going project.
Keep on top of your bills
- You want to try to pay your suppliers in a timely manner to ensure you maintain a good business relationship.
- Take advantage of payment terms and use these to their fullest – though do keep an eye out if there are any discounts for paying your suppliers early.
Take advantage of HMRC’s deferral of tax payments
- Automatically defer a VAT payment that is due between 20 March – 30 June 2020 until 31 March 2020, at the latest. Make sure you cancel your Direct Debit if you normally pay your VAT liabilities this way.
- Automatically defer payment of your July 2020 self-assessment payment on account until January 2021.
- For PAYE and Corporation Tax liabilities, HMRC generally seems happy to accept payment deferrals of up to three months in most cases so make sure you get in contact with them ASAP.
Apply for a Bounce Back Loan (BBL)
- If your business is eligible, apply for a loan through this scheme to help your business recover more quickly from COVID 19.
- The government will guarantee 100% of the loan so there is no personal guarantee.
- For the first 12 months, you will not have to pay any fees or interest, or make repayments.
- After this point, the rate of interest is 2.5% p/a so it is very attractive for a commercial loan.
If you are interested in improving your cash flow please get in contact with us. We can introduce you to Syft, a forecasting and budgeting software that integrates with QuickBooks, which will make keeping track of your business performance much easier going forward.
We also have a Youtube series on this!
If you have any queries regarding applying for a Bounce Back Loan please get in touch using the button below.