Fraser Campbell: Counting down the days - Planning for and managing “sticky” cashflow
![Fraser Campbell: Counting down the days - Planning for and managing “sticky” cashflow](https://scottishfinancialnews.com/uploads/Campbell%20Dallas%20-%20A%20Cogital%20Company%20RGB%20Logo%20May%202020.jpg)
![Fraser Campbell: Counting down the days - Planning for and managing “sticky” cashflow](https://scottishfinancialnews.com/uploads/Fraser%20Campbell.jpg)
Fraser Campbell
As Scotland gets set for another three weeks of lockdown what practical measures can businesses take to protect cashflow and ensure they can progress to the recovery stage – whenever that comes.
Reviewing and putting in place a flexible business plan is an essential first step to ensure the business can tackle the ‘new normal’. “New normal” will be a diminished version of normal business with extra challenging variables.
Key areas to consider:
- Customer demand - as distancing measures start to ease - retail and hospitality businesses may see much reduced demand whilst manufacturers may see demand soar. Forecasting demand will be the subject of another blog
- Supply chain – speak to your suppliers to work out the operational impacts
- Staff welfare – how easily can your business adapt to distancing in the workplace?
Forensic “order to cash” cycle
The shortest possible journey from order to cash is good business. Do a forensic review of all the processes that turn an order into cash across your business and make changes to improve efficiency and cash retention.
Maximise your cash buffer
- Apply to your bank for CBILS funding - Even if you don’t need a loan facility now, having it approved and ready to go will help you through any unforeseen tight spots.
- Use HMRC - VAT payments until 30 June 2020 have been postponed until next year and HMRC still offers time to pay arrangements for all business taxes
- Maximise tax reliefs - including R&D tax credits, refunds and use of losses.
- Changing your year end- can accelerate Corporation Tax refunds when using loss relief.
- Claim everything else - rates reductions, postponement and grants.
Practice “supercharged” cashflow hygiene
- Raise invoices promptly and keep your accounting records real time up to date
- Monitor cashflow against your plan daily – use automated forecasting software that integrates with your accounting system
- Credit control is key – again use automated software
- Speak to your suppliers and customers so you can help smooth each other’s cashflow
- Tighten controls around non routine and discretionary expenditure
We are learning how to adapt and revive our businesses during a pandemic – new territory for us all. Don’t hesitate to ask for help from peers, competitors, suppliers, government and advisors. We all need to keep supporting each other.
Fraser Campbell is a partner and head of family businesses at Campbell Dallas, leading accountants and business advisers in Scotland Email: fraser.campbell@campbelldallas.co.uk
- Read all of our articles relating to COVID-19 here.