Guest Blog: Improving Cash Flow & How Invoice Finance can help

We are very pleased to introduce our guest blogger, Helena Cairns from Calverton Finance, who gives some valuable tips on improving cash flow and explains how invoice finance can help.

Improving Cash Flow and How Invoice Finance can help

In recent times many businesses are not able to build up sufficient reserves to overcome short term cash-flow issues. If this is the case, then cash-flow management becomes even more important. However there are a number of steps that can be taken in order to improve cash-flow and to assist businesses through these funding gaps:

  1. Financial Information: The benefits of timely and accurate management accounts are more prevalent than ever. A cash-flow forecast is essential as this will enable you to pinpoint the months where cash becomes tight and what the shortfalls are.
  1. Credit: Begin to think of your cash-flow as the most valuable part of your business. Every time you grant credit terms to your customers it is affecting cash-flow (and real money).  Every time you negotiate extended credit terms with your suppliers it improves your cash-flow (and saves you money).  For new customers ask them to pay on invoice, or in 14 days from invoice date, and certainly before you go to 30 days end of month.  Help customers pay quickly by offering them discounts for early settlement. It could be worth considering penalties for late payment.
  1. Credit Control: A good credit controller is worth their weight in gold. More than anything good credit control is about consistency. Credit control should work to a system of statements, letters, telephone calls and only if necessary taking legal action.  Implement a system of consistent and regular contact with your customers – remember most people are happy to pay; you just need to make sure you are first on the list.
  1. Invoice Finance: Invoice Finance provides early payment against the value of invoices in a business. It also provides immediate access to a highly experienced and capable credit control team.  As well as providing upfront cash against your invoices, the Invoice Finance company will credit check customers, chase for payments and if required protect you against customers not paying.
  1. Always speak to an Expert: Calverton Finance is an owner-managed business just like many of you. We understand that there may be a small cash-flow gap which needs to be filled; even it is just short term.

Cash Flow Bridge

Calverton Finance has developed the Cash Flow Bridge facility which is a flexible and low cost solution secured against a company’s outstanding invoices. The facility enables business owners to inject short term capital which may be used to pay an upcoming VAT or Tax bill, large supplier payment or fund a new contract. This is proving very popular as there are no Personal Guarantees required and the facility is completely confidential.

In the current economic environment many feel the high street banks are extremely stringent on granting new lending or extending overdrafts.  It often takes too long to receive a decision (albeit usually a ‘no’) which can in many cases make the cash-flow problem you are trying to fix even worse!

If you are looking for finance facilities from £10,000 to £500,000 please feel free to contact me, Helena Cairns on 07785 426393 or email me at helenacairns@calvertonfinance.co.uk. For more information please visit www.calvertonfinance.co.uk

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