In these uncertain times the expression “cash is king” has never been more appropriate – or to that matter important. As the national press is full of stories of economic downturn, telephone number stimulus packages and the like, what can local businesses do to survive and prosper?

It is clear that certain business sectors have seen, and continue to see, a downturn in demand. For these businesses the ability to generate cash to continue trading is crucial. It is at times like these that effective and timely advice is essential. Businesses need to have a clear understanding of their cash needs and be able to identify at the earliest opportunity any shortfalls so that remedial action can be taken. This may include speaking to their bankers to warn them of the possible need for additional funds so that negotiations can be started early. It is widely reported that banks are needing more information to grant facilities than in the past and therefore an open and honest dialogue with the bank at an early stage is vital.

The ability to provide up to date financial information and forecasts for lenders is essential and your advisers will have a role to play in providing and presenting this information. 

Other measures that can be put in place to increase the cash available include reviewing stock holdings, negotiating terms with suppliers and customers and, where necessary, introducing cost cutting measures. It is important that all interested parties, including employees, are aware of the reasons for any changes so they can contribute to the continued success of the business.  

Where payments of tax cannot be met on the normal due dates HM Revenue & Customs Business Payment Support Service (tel 0845 302 1435) may be able to schedule payments of tax and VAT to assist cash flow.

In conclusion the capacity to generate and manage cash during these difficult times is central to the continued success of any business and working effectively with your advisers is an important part of this process.

For further advise give me a call at Duncan & Toplis, Newark (01636)
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