Most businesses are funded with cash from the proprietor, which is sufficient until the business starts growing. Problems often start when they offer credit to customers or take on an employee who requires regular payment. Suddenly cash flow – money in and out – becomes an issue.
There are some vital steps that all businesses should take to maximise receipts from customers if selling on credit:
If you need new equipment, think about deferring payment by hire-purchase, leasing or hiring. If you have been making losses, leasing or hiring might be more tax efficient.
Factoring or invoice discounting can offer financing up to 90% of the value of a sales invoice. Only business-to-business invoices can be covered.
Keep accurate accounting records so that the business can instantly assess what monies are owed from customers and to suppliers.
To prepare a cashflow forecast, start with what bills are already owed or owing and known commitments of weekly or monthly expenses such as payroll, rent and leasing or hire-purchase payments. Then build in predictions of receipts and payments from future sales and purchases. Cash flow forecasts can highlight when the business might run low on cash and can be the basis for an action plan to remedy the situation before it happens.
X-Forces Ex-Military Start-UP – Skytec UK
“I have been working on film productions for many years, teaching in University. I found that there was a high demand in aerial filming as the University didn’t cover this service to the students I decided to start as a business, with my passion for filmmaking it was a no brainer!
My main challenge was getting to grips with paperwork and accounts, X-Forces helped in giving me some excellent advice on how to manage paperwork, time and accounts.” Richard, Skytec UK
Skytec provides professional CAA qualified aerial filming services, delivered by a highly-skilled UAV pilot and an award-winning filmmaker and university film lecturer. Whilst we are based in South Wales, they cover the whole of the UK and most of the globe! Whether you are looking for a cinematic or marketing film, they have the skills and experience to deliver.
Additionally, they offer a high-resolution aerial photography and can provide either raw or fully processed aerial photographs of events, property presentations or construction projects
Skytec UK also offers aerial surveying, mapping, industrial inspection and construction progress monitoring using our UAV and in house engineer with many years of industrial experience.
Help for businesses can be obtained from ICAEW’s Business Advice Service. This is a free straightforward discussion with an ICAEW Chartered Accountant. Further information can be found at www.businessadviceservice.com
Article by Clive Lewis, ICAEW in conjunction with X-Forces.