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What should you do when there isn’t enough cash in your business?

What should you do when there isn’t enough cash in your business?
Wednesday, January 16, 2019

When your business is having a lean month (or lean year for that matter), it is important to know what to do and when to do it to so that you can continue to trade. Many business owners who fail to change their behaviour and spending patterns in enough time will eventually find that they are in real danger of running out of cash.

This makes day-to-day business management even harder than it is now and, in the worst case scenarios, you may have to cease trading. In order to avoid this, you should have a plan of action for dealing with times when cash is at a premium, being clear in your mind on the steps you need to take when more has been going out than has been coming in for a prolonged period of time.

In this article, the Panthera team explain how to get more money into your business and how to cut your costs at the same time.

Getting more money into your business

Collect overdue invoices vigorously

An overdue invoice is money that’s rightfully yours for goods and services provided and where you should be in receipt of cash which has not yet arrived. Many business owners find it difficult and stressful to remain vigilant about issuing invoices to clients and in the diligent monitoring and subsequent chase-up of accounts which have become overdue. There are ways to do it though which can take just a few minutes a day – check out one of our previous posts on 5 ways to get paid faster.

Consider an invoice factoring service

Following on from the previous point, one of the best ways to collect money due from unpaid invoice is to work with an invoice factoring service. These are specialist finance companies which will buy the debt contained in the invoice from you for roughly 90% of the value of the invoice upfront. When the customer does pay, you get the remainder of the money minus a small commission.

Negotiating better payment terms with your existing customers

To keep your existing customers on board and to increase the speed at which your money is coming in, you should consider incentivising your customers to pay more promptly. You can do this by offering them a small discount if they pay their invoices within a week rather than in the standard 30 day timeframe.

Another way that you can renegotiate with your existing customers is to insist that they either pay a deposit upfront or by getting them to set up a direct debit with your business. This way, you can more easily predict how much money you will have in the bank in the coming months without having to factor in late payments and unpaid invoices.

Reducing the amount of money that your business spends

Push back salary increases

If you have any salary increases planned, you should consider making your employees wait. This might not be the most popular move to make but it’s a lot more popular than reducing people’s hours because there is not enough cash in your business to be able to safely meet your increased fixed costs.

Delay business expansion plans

On a similar note, if you’re looking to move to new premises, employ more staff, or open up a new division of your business, you should put that on hold until you have sufficient money to do so. You can’t buy your way out of a cash shortfall, it is far more likely that you’ll simply multiply your problems.

Hire an accountant

A Panthera accountant can help you become more financially efficient in almost every aspect of your business. From taxes to cashflow stability, accountants are experienced in helping clients consolidate in rougher times and expand in better times.

To find out more, please call 01235 768 561 or email enquiries@pantheraaccounting.com.

What our clients say

For us, there is nothing better than a happy customer. Here are just a few that let us know how much we mean to them.

Pete Dungey

Simple, efficient and most importantly, hassle-free.

We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

Pete Dungey Kaleido Grafik Limited
Anita van Eijndhoven

Talk Our Language

The support and service we receive from Panthera Accounting is very good. Everything from regular meetings, a prompt e mail response and the transition of our Xero software (which we find very pro active indeed) has and is all remarkably efficient. We find Panthera talk our language and make any process as painless and easy as possible.

Anita van Eijndhoven Quidne-IT
Ash & Tim Lane

Panthera brush aside the stereotype of the typical accountant

We got in touch with Panthera Accounting by way of a recommendation; we haven't looked anywhere else since. They are an extremely professional yet relaxed group of people. We were slightly daunted by the idea of accountants but Panthera brushed aside y the stereotypes. They are very understanding when answering any questions we may have. They are completely efficient, offer sound business advice, and are fantastically priced. We will continue to recommend them.

Ash & Tim Lane Starveacre Fencing
Jayne Johnson

An Asset to my Business!

The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

Jayne Johnson Better People
John Baker

Absolute joy - they provide a first class service on every level

Working with Tory and the team at Panthera is an absolute joy - they provide a first class service on every level; from simple Xero issues through to more complicated tax enquiries, they’re always on-hand to help me get it right. I’m certainly not their biggest customer, but I’m always made to feel like their most important one.

John Baker BKR Solutions
John Castle

Professional and Friendly

I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle Ilexanna Limited & Birch Castle Homes Limited
Jonathan Morrison

They are always there to answer queries and sort out issues

I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison Wallingford Builders
Pippa Scott

Professional, friendly and personal service.

Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

Pippa Scott Scott's Commercial Services Limited
Sara Southey

Panthera puts the personal back in to accountancy!

Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey Bluestones Garden Design
Tracey Miller

Panthera are fantastic.

Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller Bigger, Brighter, Bolder BBB

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