At its simplest, cash flow management means ensuring the sum of money coming into your business is greater than the sum of your outgoings so you can stay afloat.
The full economic impact of the coronavirus is yet to be known but there are steps you can take to help minimise the damage to your small business as much as possible.
Understand how your business is performing by regularly monitoring your finances which will help you spot opportunities and risks.
Review your costs to see if they can be trimmed. Some may be fixed/contractual or relate to key services or advice but others may be discretionary and could be stopped without impacting on the business.
Look at ways to protect and predict future income – communication with your customers is key to understanding what their future plans may be. Consider how you may be able to diversify to develop new sources of income.
Forecast your cashflow this is an invaluable tool for any business, it doesn’t have to be complicated and should reflect the size and complexity of your business. They can help you track short term cash needs monitoring against available working capital and will also assist with decision making.
Keep reviewing your position, there have been huge changes in the past few months and we still have some way to go before we get back to normal trading conditions. Make sure you review reporting from your financial systems and update your cashflow forecast regularly.