{"id":5571,"date":"2018-12-12T10:00:23","date_gmt":"2018-12-12T10:00:23","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=5571"},"modified":"2026-01-29T10:28:01","modified_gmt":"2026-01-29T10:28:01","slug":"manage-your-cash-flow","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/manage-your-cash-flow\/","title":{"rendered":"How to change the way you manage your cash flow"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tMoney Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tHow to change the way you manage your cash flow\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t

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\n\t\t\t\n\t\t\t\t\"\"\t\t\t\tSinead McHale<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

Small and medium businesses are under increasing cash flow pressure as their customers seek to extend payment terms. The UK is home to a growing number of startups forming the entrepreneurial landscape and backbone of the British economy.<\/p>\n\n\n\n

In the first 10 months of 2018, circa 0.5 million startups have been incorporated in the UK (according to the StartUp Britain live tracker, as of 20 October), but why do so many fail?<\/p>\n\n\n\n

The primary reason for failure<\/a> (42%) is there is insufficient demand for their product or service. In other words, they\u2019re not solving any problem or satisfying a consumer or business need in a way that is commercially viable.<\/p>\n\n\n\n

This is not really a surprise as most of us will have a friend who had a business dream but the rest of the world was less than enthusiastic about it!<\/p>\n\n\n\n

Of the remainder, it is a concern that a number of them<\/a> (29% of total) fail because they run out of cash.<\/p>\n\n\n\n

Clearly some of these failures will be because initial investment was too low or the business plan<\/a> was unrealistic but for many, even with a full order book, they\u2019re unable to continue in business because too much of their cash flow is tied up in inventory and fulfilled orders with limited ability to release it.<\/p>\n\n\n\n

The significant and ongoing increase in the use of technology in financial services, driven by fintech firms, is transforming the way businesses are managed and run, offering innovative solutions that aide financial management and planning.<\/p>\n\n\n\n

Fintech is quickly removing the need and burden of costly financial expertise, freeing up time for business owners to concentrate on their business and growth by providing easy to use tools, including automated debt chasing, cash flow reports, easy to use accounting software<\/a> and detailed risk insights.<\/p>\n\n\n\n

To fully benefit from the tools available and manage your cash flow, the basics remain imperative to survival and success. Here are four things to consider:<\/p>\n\n\n\n

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The Art of Being Paid<\/h2>\n\n\t\t\t\t\t\t\t\t\t
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Chasing invoice payments doesn\u2019t have to be painful. Use this kit to answer a few questions about your customers so you understand their payment drivers, then read our advice on how to flex your style for each, calling techniques and much more.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tGet your guide<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n\n\n\n

1. Know your customer<\/strong><\/h2>\n\n\n\n

Clearly it is important for any business to know who their customers are and critically important to know that they can pay for the goods or services on whatever terms they are provided.<\/p>\n\n\n\n

For B2C businesses, this is relatively easy as payment is predominantly at point of transfer of goods at worst.<\/p>\n\n\n\n

For B2B businesses, goods and services are generally released ahead of any payment, even when on \u201ccash on delivery\u201d terms. In these circumstances, finding a platform that offers risk insights on customers before you work with them can help provide better understanding before signing credit terms.<\/p>\n\n\n\n

2. Timely issue and payment of invoices<\/strong><\/h2>\n\n\n\n

Immediate payment for goods and services would certainly reduce the likelihood of cash flow voids but in reality, businesses \u2013 particularly those seeking to establish themselves \u2013 need to offer reasonable payments terms to their customers.<\/p>\n\n\n\n

Businesses must ensure they issue their invoices<\/a> in a timely manner.<\/p>\n\n\n\n

While this may be obvious, all too often the drive to deliver to customers is not matched in the administration required to get paid for what has been done.<\/p>\n\n\n\n

Read more about managing your cash flow<\/strong><\/p>\n\n\n\n