Planning ahead to boost your business’s resilience.
During what would normally be the busiest period of the year for businesses in retail, hospitality and other sectors, many will now be keeping a close eye on their cashflow as they deal with the impacts of COVID-19.
While Government-backed schemes like furlough, grants and loans will provide some much-needed support, there could be additional disruption to contend with as the UK reaches the end of its transition period with the EU and new rules take effect from 1 January 2021.
As a result of the pandemic, the Bank of England estimates that small companies in the UK could face a total cashflow deficit of £40 billion to £70bn this year.
Even before the pandemic, cashflow problems were among the main causes of business failure. The danger is they can be hard to spot if other financial measures, such as profit, are looking positive, and in many cases the signs aren’t obvious until it’s too late – at which point, you may struggle to pay your staff or bills.
To avoid running out of money and prepare yourself for financial shocks, it’s essential to monitor the way your business’s cashflow looks now, and forecast how it might look in the future.
After you’ve read it you can also have a look at our simple 12 week cash flow forecast and have a chat with us about any problems, if you need any further support or you’d just like to talk your cash position through.