On the long road to recovery, cash might be your best friend

Cash is king, the old saying goes. As a light finally looks to be emerging from the tunnel of the Coronavirus pandemic, this is likely to remain as true as ever.

With generous support measures extended in the Spring Budget (read our write up here) and the apparent success of the government’s vaccination project, businesses have a lot to be positive about. But with Covid-19 still casting a long shadow over the present, future proofing your business should be top of the agenda. Controlling your cashflow is one of the most fundamental ways to do this, so here are our top tips making the most of your money:

1.Budgeting comes first. It’s vital that you know your costs over the coming months, know how they’re likely to fluctuate, and have a plan to cover any potential shortfall.

2.Keep an eye on expenditure. You should constantly ask yourself the following two questions: “do I need to spend this?” and “do I need to spend this now?” Schemes to defer payment (like the government’s Time to Pay) can help you spread costs over a longer term.

3.Embrace useful technology. Which cloud-based accounting service do you use? And do you get the maximum value possible from it? At JW Hinks, we ensure clients make the most of software packages like Xer0, giving them greater control over their finances every step of the way.

4.Learn to forecast. A short-term cashflow forecast (24 months) is essential for business success. Budgeting, controlling expenditure, using technology, and forecasting won’t save you if you run out of cash.

5.Don’t save for savings’ sake. While a cash cushion can protect your business to some extent, there’s no longer-term benefit to hoarding cash, given current interest rates. So, save for safety, but spend for success. When a good use for capital appears, don’t be afraid to make the most of it.

6.Get all the help you’re entitled to. There are a wide range of government support measures available to help businesses survive. Getting as much as possible out of government aid is not only every business’s right, but could partly determine which prosper and which struggle as lockdown ends.

At JW Hinks, our professional and experienced team is available to help clients with all of the above. Just get in touch on 0121 456 0190 to learn more about how we can help you emerge from lockdown in the best position possible.