The most common small business cash flow problems and what you can do to make this your number one priority. Cash is the lifeblood of every business and letting it run dry would cause serious problems. That’s why ensuring your firm doesn't suffer from cash flow problems should be your number one priority.

1. Keep the wheels turning
Five ways to keep cash flowing
through your small business

2. If there isn’t enough cash running through your
business to pay your staff and overheads, it will
have a negative effect on your operation.
Ensuring that your firm doesn’t
suffer from cash flow problems
should be your number one priority.
#
1

3. The best way to keep cash flowing is to head off any
potential problems before they threaten your business.
Here are five steps you can take to keep your firm on
the road to success.

4. Drawing up a cash flow forecast can
help you see where you are vulnerable.
1. Look to the future

5. It’s important to learn how to recognise the
warning signs that your forecast might contain.
!
1. Look to the future

6. It’s time to act if...
1. Look to the future

7. It’s time to act if...
• You have a payroll run or several bills due to be
settled before you get paid for a large order
1. Look to the future

8. It’s time to act if...
• You have a payroll run or several bills due to be
settled before you get paid for a large order
• Your forecast shows that if one major customer pays
late, you won’t be able to pay your bills on time
1. Look to the future

9. It’s time to act if...
• You have a payroll run or several bills due to be
settled before you get paid for a large order
• Your forecast shows that if one major customer pays
late, you won’t be able to pay your bills on time
• Your suppliers’ credit terms are stricter than your own
– so you’re paying out cash faster than it’s coming in
1. Look to the future

10. It’s time to act if...
• You have a payroll run or several bills due to be
settled before you get paid for a large order
• Your forecast shows that if one major customer pays
late, you won’t be able to pay your bills on time
• Your suppliers’ credit terms are stricter than your own
– so you’re paying out cash faster than it’s coming in
• You have little or no spare cash to fall back on
1. Look to the future

11. 2. Get on top of your
record-keeping

12. Keep the cash flowing
2. Get on top of your
record-keeping

13. Keep the cash flowing
• Issue your invoices as soon as you can.
The sooner you do, the earlier you’ll get paid
2. Get on top of your
record-keeping

14. Keep the cash flowing
• Issue your invoices as soon as you can.
The sooner you do, the earlier you’ll get paid
• Consider offering discounts for early payment…
and interest charges on overdue invoices
2. Get on top of your
record-keeping

15. Keep the cash flowing
• Issue your invoices as soon as you can.
The sooner you do, the earlier you’ll get paid
• Consider offering discounts for early payment…
and interest charges on overdue invoices
• Make sure you bank cash and cheque payments as
soon as they come in and if you haven’t already done
so, consider letting customers pay by BACS
2. Get on top of your
record-keeping

16. If you can’t spare enough time, maybe it’s time to
2. Get on top of your
record-keeping

17. If you can’t spare enough time, maybe it’s time to
• Take on an extra member of staff, possibly part-time,
to handle your records and invoices
2. Get on top of your
record-keeping

18. If you can’t spare enough time, maybe it’s time to
• Take on an extra member of staff, possibly part-time,
to handle your records and invoices
• Outsource your bookkeeping to a specialist
2. Get on top of your
record-keeping

19. If you can’t spare enough time, maybe it’s time to
• Take on an extra member of staff, possibly part-time,
to handle your records and invoices
• Outsource your bookkeeping to a specialist
• Use a software package that makes it easier to
keep track of payments and can alert you to chase
outstanding invoices
2. Get on top of your
record-keeping

20. 3. Know your customers

21. Carry out credit checks in advance
Keep track of who pays late and
base future trading decisions on it
3. Know your customers

22. Prompt payers Laggards A firm in trouble
3. Know your customers
!

23. Prompt payers
These are the customers every business
dreams of, settling their invoices on
time or even sooner. Is there any way of
increasing the amount of revenue you
get from them?
3. Know your customers

24. Laggards
If a customer pays late on a regular
basis, ask what you can do about it.
If they are a major source of business,
your hands might be tied. But it’s worth
thinking about how you could survive
without them and looking for other
sources of revenue or find ways to
encourage them to pay on time, such as
early payment discounts.
3. Know your customers

25. A firm in trouble
If a former “prompt payer” has started
falling behind schedule, it could be a sign
that they themselves are struggling with
cash flow. Consider scaling back the
business you do with them.
3. Know your customers
!

26. 4. Manage your growth

27. Growing too fast is one way to run out of cash.
But a carefully controlled lending service such
as invoice finance can make a big difference.
4. Manage your growth

28. • Your outstanding invoices are an asset, and they can
be used to borrow money
4. Manage your growth

29. • Your outstanding invoices are an asset, and they can
be used to borrow money
• An invoice finance firm can give you cash upfront
against your invoices which you either pay back once
they are settled, or which the firm chases up on your
behalf
4. Manage your growth

30. • Your outstanding invoices are an asset, and they can
be used to borrow money
• An invoice finance firm can give you cash upfront
against your invoices which you either pay back once
they are settled, or which the firm chases up on your
behalf
• If your cash flow forecast indicates there could be
trouble ahead, now might be the time to look for
outside assistance. Don’t wait until it’s too late
4. Manage your growth

31. It can be hard to stay focused on running
your business when you have financial
problems in the background, but it’s
important not to neglect what you do
best when times are hard.
5. Get back to doing
what you do best

32. 5. Get back to doing
what you do best
Keep the wheels in your business turning

33. Keep the wheels in your business turning
5. Get back to doing
what you do best
• Continue to develop new products to add further
value to your service offering

34. Keep the wheels in your business turning
5. Get back to doing
what you do best
• Continue to develop new products to add further
value to your service offering
• Spend time on building a lead generation strategy
as attracting a pipeline of new customers will ensure
your business’ stability

35. Keep the wheels in your business turning
5. Get back to doing
what you do best
• Continue to develop new products to add further
value to your service offering
• Spend time on building a lead generation strategy
as attracting a pipeline of new customers will ensure
your business’ stability
• Explore new markets for opportunities to plug any
gaps in your offering, or quick wins to expand your
outreach

36. Focusing on these steps will keep your cash flow and
business running smoothly, and will help to ensure that
the wheels of your business keep on turning.
5. Get back to doing
what you do best

37. See how the best business lenders are
finding new ways to fund business growth
Download our free eGuide - A new landscape:
business lending after the financial crisis
Click here now
Close Brothers Invoice Finance is a trading style of Close Invoice Finance Limited (‘CIFL’), a subsidiary of Close Brothers Limited. CIFL is registered in England and Wales
with company number 935949 and registered office at 10 Crown Place, London EC2A 4FT.