Call 020 7794 5757 - Email info@numerallp.com

Keeping an eye on your cashflow

Including a cashflow checklist.

Numera can help businesses in the London area with cashflow management and projection. Here are some of the basic principles...

Cash is the lifeblood of a business, but with so much emphasis usually put on profitability, it can be easy to overlook this fact. Of course, the bottom line is important, but poor cash flow management can drive a growing and/or profitable company out of business.

The risk is especially great for expanding companies. For example, if billing is delayed at the same time as stock is accumulated to fulfil increased orders, you can find yourself short of the cash needed to pay suppliers and employees.

The benefits of projection

Cash flow projections are critical, especially in times of need, but you don’t have to wait for a crisis to benefit from good cash flow planning. A properly developed cash flow projection can help a business foresee and prepare for potential shortages. Cash flow management can also help you:

  • Maintain adequate cash reserves to pay bills, expand the business and invest in facilities and product development
  • Reduce interest costs through managed borrowing
  • Receive discounts through bulk purchasing
  • Improve relations with the bank manager

Businesses that prepare cash flow projections often learn something about their systems, the dynamics of their business, and the process often has other positive outcomes. For example, you might discover that you need to pay more attention to certain customers, or that you can defer payments to suppliers more beneficially.

Cashflow checklist

20 signs that your business could be facing cashflow problems

To help you focus on your cashflow and profitability we have prepared this checklist. Simply answer ‘yes’ or ‘no’ to say whether each statement is true for your business. If you have more ‘no’ answers than you are comfortable with, you may be facing cashflow problems. Call us to discuss an action plan.

Print
  Yes No
When we receive a job, we know we can complete it and be paid on our terms    
We send a bill as soon as we complete a job    
Invoicing documents are accurate, complete and clear    
Our credit procedures alert us to problem customers so that we can follow up on outstanding accounts    
We monitor and enforce our credit terms and obtain deposits from ‘doubtful’ payers    
We finance capital expenditure in the most cost-effective manner    
Our pricing reflects time spent on jobs and covers associated risks    
Employees understand the importance of the business’s cashflow    
We complete work efficiently    
We catch mistakes before they reach customers    
Mistakes cause us to improve processes    
We keep a close eye on budgets throughout the year    
We determine the viability of outsourcing work    
Adequate controls are in place to control employee overtime    
We are effective in negotiating materials and supplies contracts    
We forecast cashflow monthly and base our financial arrangements on our projections    
Our bank is our partner and understands our business and its financial needs    
We always see that work is done by the least expensive, capable employee    
We link staff pay to productivity and company profits    
Our standard operating procedures are written down and everyone follows them    

If you are in the London area and would like advice on cashflow management and cashflow projections, contact Numera.

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Company details

020 7794 5757

Numera, 4th Floor Charles House, 108-110 Finchley Road, London NW3 5JJ

Numera is a trading name of Numera Partners LLP | Company Registration No. OC365787 | Place of Registration: England & Wales | Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales.

About us

Numera is a newly established forward-thinking firm of chartered accountants, with over 25 years in experience of audit, accountancy, taxation and business advisory services.

We work with clients in a large variety of industries and sectors; from sole traders to multi-million pound turnover organisations. We aim to create and maintain a close relationship with our clients. By being so involved, we are able to identify opportunities for our clients as well as possible risks that our clients may be faced with.

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