OCL Accountancy: Cash Flow Management

Poor cash flow is the number one reason businesses fail.

Following on from last month’s article on how cash flow planning is best practice in any business and critical to survival and growth. Setting targets and monitoring your actual cashflow against your forecast will enable you to predict large cash outflows and respond to changes in your business.

A proactive business owner needs an understanding of cash and liquidity for better decision making. All businesses should have a Cash Flow Forecast in place at the beginning of the new financial year. Having said that, we can prepare one at any time.

Cash Flow Management Coaching
Helping our clients look ahead with confidence is core to our purpose as your accountants. We want to work with you beyond preparing a Cash Flow Forecast. Our Cashflow Management Coaching service has been designed to treat the underlying causes of poor cash flow – starting with your Cash Conversion Cycle.
Together we’ll conduct a thorough review of the potential causes of your cash flow challenges. We will set annual goals and devise an action plan for improvement and hold you accountable to implementing simple strategies to maximise cash flow.
Inadequate cash flow is a symptom of management problems in a business, NOT the cause. We must fix the underlying issues.

Benefits of Cash Flow Management Coaching:
• Monitor actual cash flow against forecast in your accounting or reporting software
• Allows you to predict and plan for large cash outflows
• Understand key cash flow drivers and your business’s Cash Conversion Cycle
• Identify ways to avoid late payment penalties and interest
• Improve your relationships with financiers and suppliers
• Peace of mind that your cash flow needs are known and properly funded
• Improve business processes to boost cashflow, profit and business value

Profitable businesses can experience extreme cashflow problems, just as unprofitable businesses can survive if they’re well-funded. Understanding the difference between profit and cash and your business’s Cash Conversion Cycle is essential for your business to be viable in the long-term.

For more information, call Tristan Wilcox-Jones, Matt Bryant or Lucas Knight on 1225 44507 to arrange a no-obligation meeting