Many business owners would agree that 2020 is turning out to be one of the most challenging periods in modern history 
And one thing is now essential for all businesses that have survived the coronavirus lockdown and wish to get up and running again – cashflow. 
Darren Peacock, owner of Peacock Finance, explained: “It might sound like a cliché, but right now it’s truer than ever – cash is king.” 
So, what should SMEs be asking themselves now? 
Darren said: “Now is the time to review your entire operation. Is your workforce as lean as it could be? Can you 
reduce your spending? 
“Analyse your costs, strip out non-essential expenses, re-negotiate contracts, and understand where your sales are coming from. 
“Whatever strategy you plan, one thing that remains critical is cashflow.” 
Darren recommends ensuring your management information is as up-todate as possible. He said: “You need a good accountancy system with live information. As a minimum, in the first week of the month, check your previous month’s figures. You need to know where your break-even point is, which is the point in the month at 
which you’ve paid all your expenses and are profitable. Then you can start to look at where improvements can be made. 
“It’s essential to have a cashflow forecast. Businesses with amazing sales are still at risk of going under if the cash isn’t right.” 
Darren is an expert when it comes to helping SMEs deal with cash shortfalls, but admits it’s a much simpler problem to solve when it is picked up early. 
“These might feel like uncertain times, but with support from people with the right knowledge, your business will quickly get back on track.” 
Things to consider to improve cashflow include: 
1. Don’t over-order! Storing a load of stock is just tying up your money unnecessarily. Most suppliers deliver on a daily basis, meaning you can use a ‘just-in-time’ order system and keep your cash as free as possible. 
2. Be prompt with your invoicing – the sooner you get money owed for sales or services, the better. 
3. Make sure your customers pay you on time – you need your money in your account, not theirs. 
4. Think about reviewing customer payment terms to incentivise early payment. 
5. Don’t forget to sense-check and benchmark all of these strategies against your cashflow forecast. 
6. Identify any cash gaps as early as you can, and seek advice on your options for addressing them. 
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