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Steve Knowles of Knowles Warwick Accountants delivered an online talk for our members on Tuesday 7th July 2020 about how to manage your cash flow so you’ve got enough  money for the wages at the end of every month. 

We’re likely to have 2 quarters of negative growth, otherwise known as a recession, so beware.

Credit Control

Supplying your customers with services or goods before they pay is like giving them an unsecured loan. You must understand the warning signs e.g. longer delays in payment. It may be worth getting paid on delivery with a small discount.

Debtor Days

How many days on average are our customers taking to pay? It is absolutely vital you understand this. Is it the say 30 days you say you expect payment or more like 45 or even 60 days?

Reduce your Outgoings

Look at every item you spend and ask if it is necessary for the business. Look at direct debits,is each one really needed? because without it my business can’t run. Review contracts e.g. mobile phone contracts.

Restructure your business

Is each employee doing all they possibly can to grow the business? Are you the owner unique? The business has value if you are.

Working Capital

Invoice finance – brings cash into the business sooner than normal, but what is the cost. You need to be making a gross profit of at least 25% to make it worthwhile.

Asset finance is cheap and easy to get.

Equity many look at how much share capital you’ve got. A very small share capital shows weakness.

Treat your suppliers like a bank. Look at other possible suppliers. Monitor your stock levels. Reduce slow moving lines.

Look at the bank every day. Sell your management team, and your own skills, to the bank.

The good thing about a subscription model is money is coming in every month regardless of output; getting cash in is critical to success.

Shelter your Assets

Sole traders or partnerships are dangerous; incorporate your business. There are a few professional service costs in doing so. A bank can take a debenture over a limited company and so increase your borrowing ability. 

If you are going ahead with a riskier business than your normal one, think about forming as a separate company.


Sales are difficult now; what other products or services could you sell? Possibly change your model, reduce any discounts you give. Increase your prices by 1 or 2 % and nobody will leave you. Be aware of price points.


Nick Butler