Unfortunately, small businesses and start-ups are prone to facing financial difficulties. Sometimes this can happen very quickly, so acting fast to address issues is very important to nip financial problems in the bud. Most financial problems can be avoided by keeping good and consistent records. This is important because problems can be diagnosed quickly with good records.
Managing your cash flow is important. Accurate and up-to-date records of cash flow are a good starting point, but businesses should also use cash flow forecasting to make sure they understand the dynamics of their business. Improving your business’ cash flow is also an important tool; this means not having too much capital tied up in inventory or making the most advantageous use of credit lines with suppliers and contractors.
The worst case scenario for any business is when it is facing insolvency. However, there are many implications when it comes to insolvency, so it is important to seek advice early on.
For professional and friendly advice for all of your business financing needs, please contact Wilkins Kennedy business advisers.