Cash flow management can be an issue that causes many sleepless nights. No matter how profitable your business is, it’s vital that you stay on top of your books. Intuit Quickbooks conducted a research project globally this year. It focused on the cash flow issues that many self-employed workers and small business owners have to face.
Their research revealed that:
- 1 in 7 small business owners has not been able to pay employees because of cash flow issues. This equates to 2.2 million people in the UK not being paid on time.
- 38% of small business owners who have faced cash flow problems have been unable to pay debts
- On average, small business owners lose around £26,000 by turning work because of insufficient cash flow
What is cash flow?
Put simply, cash flow is the total amount of money that comes in and goes out of your business. A forecast can be established in order to predict incomings and outgoings over a set period – often 12 months.
Why does cash flow management matter?
You might be thinking that your time should be spent looking at profits as opposed to cash flow. However, whilst profits certainly matter, they are not enough on their own to keep a business sailing smoothly. Why? Because any money you make must also be available when you need it. After all, if you want to make money, you do have to spend some too. Whether it’s new equipment or a new employee, you always need access to your money in order to pay for the things that allow your business to scale, and profits to be made.
There can sometimes be a delay before you can access the money your business is making, but in the meantime, you will still have upfront business costs such as rent, payroll, and marketing expenses. If you don’t have enough cash available on hand, your business could end up in serious trouble.
The issues don’t necessarily mean there is something wrong with your business. However, in order to prevent any issues arising, it’s important to pick up any problems early and get looking into them as a priority – which is where we can help.
Here at Thomas Nock Martin, our chartered accountants in Brierley Hill can provide you with fully comprehensive and tailored cash flow support to keep your business running smoothly. From record-keeping and financial planning to helping you reduce your expenditures and making sure you are paying minimal tax whilst keeping you compliant, our accountants will be your second pair of eyes. We are entirely committed to identifying areas where you can save money.
Contact us today
At Thomas Nock Martin, we’ve helped many small companies across the country manage their cash flow, financial planning, and avoid problems. With plenty of experience, knowledge, and expertise under our belts, you can rely on us for your small business support. For more information about our services, call 01384 261300 to speak to a member of our helpful and friendly team.
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