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Company cash flow problems - A worried directors guide

1 August 2017

We can't pay our bills on time, HMRC is pressing for payment and we are struggling to get cash in.

What can we do about our company cash flow problems?

First of all, this is a common problem for almost every business at one time or another. In the current post-recession (if you believe that) period, company cash flow problems can actually get WORSE, not better.

TEN TOP TIPS to manage company cash flow problems

  1. Manage cash flow daily. NOT weekly, NOT monthly, repeat- manage cash flow DAILY.

    Please click here for our FREE daily cash flow spreadsheet.

    • This is used by hundreds of companies every day (including our company) to manage cash in and out of the business easily and quickly.
    • Fill in the cash flow and use every day to see "where you are" and what problems lie ahead. Plug in the dates that EACH company that owes you money should pay you, then you have a guide to use for point 2 below.
    • Our DAILY cash flow model will at a glance point out any major problems that lie ahead. It will also help with.....

  2. Debtor collection: are your customers taking longer to pay you? If so why is this? Best thing to do is to find out (see marketing below in section 4). By asking how things are going with ALL of your customers, you can assess your own debtor collection dates, find out how they are doing and market to them. And then update the daily cash flow, it should show when customers are likely to pay you. This can help with your company cash flow problems.

  3. Cost cutting:  go to our dedicated cost cutting guide and read it carefully.

  4. Marketing and a marketing plan - do you have one? The easy thing to do in a cash flow crisis is to STOP marketing, don't do that - it is fatal.

    • We see companies every week that have no marketing plans or activities, they simply wait for the phone to ring! Then the company dies.
    • Set up an action plan. Discuss internally who will do what and then get marketing.
    • For example, call all your customers personally. Don't fudge this, by calling you will hear how their business (which you rely on) is faring. Have they got growth plans, have they decided to cut costs and buying for a while? If they are making cuts, you need to lower your business expectations. If they are growing, find out if your firm can help. Plug this information into the daily cash flow.
    • The faster you get products to your customers, the better the cash flow
    • Do you have a website? If not get one NOW - IT does not have to be expensive especially now with WordPress. 

  5. If you have a site, is it working for you? Who does your marketing? Are they driving traffic to your site? If not call and ask why, agreeing on strategies and setting them targets. Monitor spend very carefully.

  6. Get on with producing a BLOG, Twitter and Facebook. Join LinkedIn. DID YOU KNOW these are all FREE marketing tools that can be linked together (FREE), that can boost traffic to your website and get enquiries, you are reading this page are you not? How did you get here, through MARKETING of course!

  7. If you have not got a pay per click campaign, try using Google Adwords now, new customers get 30-50 to spend generally. Set up a web account for your business. There are thousands of guides on the web to help you with this and other forms of marketing ALL FREE!

  8. Employment costs: Cut over time, cut bonuses and save money by asking employees to reduce their hours, if this is not radical enough you may need to lay some or all of them off.

  9. Ask HMRC for a Time to Pay Deal, use our programme here if you don't know what to do. HMRC will allow you to spread debts over time providing you stick to their deal. 

  10. Polish up your business plan and go to the bank for some lending through, factoring, EFG or bank loans. Dont have a business plan? What do you mean you don't have a business plan, do you know the adage, fail to plan, means you plan to fail. Get a business plan written now, have a summary page for the cash flow problem action plan. 

  11. If the above is not sufficient to stop aggressive action by creditors, TALK to them. In writing ask for a "time to pay" plan.

  12. Reduce your earnings or drawings from the business. Borrow personally if required to fund your living costs. If you cannot cut your own costs, then is the business viable if it cannot support you?

  13. Work relentless hours and 7 days a week to pull the business around. If you really believe in the business, it will not be a chore a challenge yes but not a chore. Get advice from a trusted colleague, friend or business advisor. Have an outside pair of eyes look over the business plan and numbers, for example, your accountants. You may have missed something obvious.

  14. If after all that you still cannot deal with cash flow pressures, then you may need a more radical and legal solution. See the solutions below that can save a viable business or close it if it is not a viable business. We can advise on each of these on 08009700539 (free).

    Pre-pack Administration


    Creditors Voluntary Liquidation


    Company Voluntary Arrangement

    Expert guide for worried directors - all FAQs answered

    Use this page to establish if the company is insolvent is my company insolvent?

    If it is insolvent you may need to think about company voluntary arrangement or voluntary liquidation if the company is simply not viable no matter what actions are taken. In any event, when the company is insolvent you have to ACT.


    A cash flow problem can be all consuming and very difficult to live with, but using our ten top tips above you can set out a plan to attack the problem on all fronts and hopefully get through it.

    If not, get professional help for your company cashflow problems from KSA Group. We do this stuff every day!

    Remember that a growing and successful business can still get into cashflow problems. Why? You can be getting lots of orders for you product and extending credit to purchasers but your suppliers won't give you credit. This is termed overtrading and is quite simply described in this video by Moneyweek.

    If the company is insolvent you must act to MAXIMISE CREDITORS INTERESTS. Failure to do so could lead to personal liability.

    Just need to fix a cash flow problem with say PAYE and VAT? See this page for help!

    Call now if you have questions - 08009700539. Email

A Worried Director

The Ultimate Guide For Worried Directors

Worried about poor cashflow? How to win new work? How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today.

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