How to deal with an inconsistent cashflow

How to deal with an inconsistent cashflow

One of the biggest difficulties for businesses is dealing with inconsistent cashflow. Many things can lead to this such as extended supplier payments, seasonal fluctuations or clients just not paying you on time.

A steady amount of cash coming into your business can ensure you have enough funding to see you through tougher times. A lack of cash into the business on a regular basis can hinder your ability to research and develop your products and services further. You could also miss out on potential growth opportunities.

In order to meet the challenges of dealing with a changing cashflow position, you could look at putting in place some different funding options such as:

Invoice finance

In many cases, your clients’ payment terms may result in them pushing their payment due dates out as far as possible. During this period, you will still need to cover your business overheads.

By setting up an invoice finance plan, you can sell your pending invoices in order to receive a large portion (around 80%) of the funds upfront. Once the invoice is paid in full you will then receive the rest of the balance minus a small admin fee. This can be a great method of funding to see you through tough times.

Monthly budget

If you run a seasonal business, your cash flow will tend to be paid in different cycles. Putting together an annual budget with monthly cash flow forecasts will ensure you can avoid the months where you fall short.

Credit control

A well-run bookkeeping service will ensure you are well-organised and invoices are being distributed on a timely basis. Bad debts can also be avoided as invoices are chased and money is collected in a promptly manner. When you are busy running your business, outsourcing this function can free you up to concentrate on what you do best.

Cloud-based software

By using a cloud-based accounting software system such as Xero, you can keep on top of all of your invoicing efficiently and ensure any outstanding invoices are chased in a timely fashion. You can easily run your business from anywhere and keep in touch with your outsourced finance department.

There are many ways to help your business through cashflow issues, working with the Clear Vision Financial Management team, we can help you to keep on top of any cashflow issues you may face.

If you would like a chat about how we can support you with an inconsistent cashflow, please get in touch with the friendly Clear Vision Financial Management team. You can call us on 01794 330025 or email us