CASH IS KING is a phrase you often hear, and with ever increasing supplier prices and economic uncertainty this could not be more true. Cash is the lifeblood of any business. It is essential to manage your cash flow in order to maintain resilience, adapt and make the right business decisions.

Cash flows reflect all the cash that is flowing in and out of your business. Owners can look at the direction of the cash flows for insights about the profitability of specific products or services and overall market patterns.

Some types of business are more likely to run into cash flow problems, some can be seasonal in nature, and other types may appear to be more resilient.  As you are a business owner, you might be wondering which category your business falls into. No matter how inventive or simple your business model is you can still have problems with cash flow.

Our thoughts on managing the flow of cash in your business:

The first stage of understanding and predicting how funds flow is to perform a health check on your accounting records. Are you using a cloud accounting package such as QuickBooks? If the answer is no, then it should be time to make the move to digital records. The great benefit of using a digital accounting solution is that it allows you to see a LIVE picture of how your business is performing in real time. This then allows you to make informed business decisions as opposed to relying on financial statements that are 12 months out of date.

When was the last time you reconciled your bank account?

By using a cloud solution such as QuickBooks you can reconcile your bank with ease through utilisation of the bank feed functionality which connects and downloads the transactions automatically every 24 hours. Without your bank being up to date you will not be able to get an accurate picture of the available cash in your business.

Look at your latest profit and loss statement and check that your income is sufficient to cover your expenses. If your profit is falling behind your expenses and cash flow is slowing down, you might need to take action. QuickBooks cash flow forecasting tool allows you to see ahead over the next 12 months and helps you plan accordingly.

Next create a yearly budget – look where cash could become tight and months where you can save to cover off the quieter times. Look at those quieter months and think about flexible work scheduling, new products or services, or other activities to tide you over.

Finally make sure you collect your money from your customers. It is vital to have a good credit control policy in place. Set credit limits and payment terms to ensure customers follow the rules or reward customer loyalty by offering early bird discounts. If you take on new customers, make credit checks. Penalise late payers and request up front deposits or payment. You can also get apps that will automatically collect and reconcile your invoice / bank within QuickBooks – saving you time and money.

Contact us.

If you require more information on how to manage your cash flow or support with your bookkeeping please contact Jonathan McNeill at PGR accountants on 02890788880 or email on