Top Tips to help manage cash this winter

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Christmas is coming and, as wonderful as the season can be, it can put a huge strain on a business’s cash flow.

Often staff get paid early so they can spend large amounts of money, often on gifts no one wants!

Your business may also be shut down over the period, which means sales stop. And even if your business doesn’t shut down, many other businesses do, meaning cash collection can be tough and you may find it takes longer to get paid. This can be particularly painful for the 36% of businesses that use a bank overdraft or a credit card to run their business.

So here’s a few tips to help manage your cash flow this winter:

Make good use of accounting software and get your numbers in order

Sounds obvious, and as an accountant I’m going to say this, but it’s amazing how many businesses don’t have any clue about, never mind control over, their finances. Years ago, this used to be much more of an effort, but technology has been such an enabler in this area. It’s never been easier to get your numbers in order, and you don’t need a degree in finance to do it.

I absolutely understand that sometimes facing up to a cash flow problem can be tough, and it can seem easier to bury your head in the sand. However, you must remember that if you can’t measure something, you can’t monitor it, and that has to be the first step to have any hope of managing cash.

Two great pieces of software to look at are either Xero or Quickbooks Online.

Get a good accountant

Your accountant should be someone you speak to more than once a year. The days of dropping off your records and waiting for a tax payable figure are well and truly dead. Nowadays, your accountant can be plugged in to your accounts all year round, and they should be a regular sounding board for much  more than just the year end accounts. If they only ever talk about the profit this year versus last year at a year end meeting and never even mention the ‘C’ word (cash) – sack them now.

Forward not back

Getting your numbers in order is step one, but the next big tip is to look forward not back. I’d always champion a rolling three-month cash flow forecast to look out for any immediate dangers.

Again, technology has made this easier compared to  the days of having to do this on a spreadsheet. These days cloud app can do a lot of the heavy lifting, but it still requires some thought and effort to plan ahead.

Christmas is a prime example of this as I’ve already mentioned – are you going to be paying staff early and, if so, how much breathing room does this give you? If you make spending decisions purely on the basis of your bank balance you could be in big trouble.

My recommendations for software around this area would be Fluidly or Float.

Planning the big spends with budgets and forecasts

Fail to prepare, prepare to fail, as they say. So now I’m talking longer-term spending plans. Sounds obvious, but it’s surprising how many businesses don’t have any kind of forecast or budget to work to.

On average, businesses look for funding just seven days before they need it. That’s a crazy and worrying statistic.

So as well as looking forward for the regular spends, we need to think more about any major expenditure required over a rolling 12 months.

It’s obvious that buying something expensive, such as property, vehicles, machinery or computer equipment can put a massive strain on cash flow. But planning on how to finance just seven days beforehand is extremely risky.

There are some great modelling tools that can help with this. I love Futrli for this as it does a good job of highlighting the difference between cash and profit.

Polite persistence pays off

After working hard to deliver a great service or product, there is nothing more soul-destroying than not getting paid on time. If you work on credit terms, the chances are that at some point you won’t  have been paid on time.

A lot of clients I work with often put chasing these debts to the bottom of the list even though it is the lifeblood of their business.

This is probably a result of several factors; they’re busy running their business, they don’t have actual details of who owes them money, or phoning and chasing a customer for payment isn’t always the nicest of conversations so it gets pushed back to another day.

Ultimately, if you can develop a system for politely chasing customers on a regular basis, the results can be significant. We’re talking  a potential cash flow boost of thousands of pounds here.

And this is an area where technology can make a huge impact. My favourite app of all time – Chaser – does just that simply and effectively.

It is an automated credit control platform that sounds like a human chasing your debts religiously. And therefore improving your cash flow and saving you hassle and time. It doesn’t matter if you raise 20 or 2,000 invoices a month, you should automate this process.

So those are my top five cash flow tips. If you would like to find out more, please contact me on 0161 236 6936 or via email at

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