Spot the warning signs

Your business is less likely to run into deep cash flow problems, even insolvency, if you’re watching out for and reacting to the early warning signs.

Unfortunately, it’s too easy to get caught up with the day-to-day and ignore the warning signals that your business is sending out. These signals will come in many different ways and individually they are no cause for alarm. But when you start looking at the bigger picture, you may see a pattern that’s alerting you of impending problems.

These problems will usually take a financial form, and when they finally turn into a major crisis, it will be because the business has run out of money. At that point, it’s very hard, if not impossible, to recover the situation

Financial clues to an approaching crisis

A major cause of potentially disastrous cash flow problems is late payment by customers. If they are constantly keeping you waiting for cash, is the delay having a detrimental effect on your ability to pay suppliers, staff and the tax man?

Just because your business is growing or profitable doesn’t mean it’s not at risk of cash flow problems. Rapidly expanding firms often struggle to find the working capital needed to finance the running costs of growth – more staff, more rent and more purchases.

It’s for this reason that newer forms of finance, such as invoice factoring, are being used by start-ups. It allows them to effectively get paid almost as soon as they’ve raised an invoice, shortening the cash flow cycle and allowing growth to be funded without taking on loans.

Business Recovery helps firms to find cost-effective invoice finance deals, because we match your circumstances with our panel of leading funders, identifying the right solution. Call us now on 01451 832533 to discover how much extra cash your business could raise.

Non-financial signs of cash flow problems ahead

Business owners have a lot on their mind, especially during periods of high growth, or when times are particularly tough.

If you’re continually worrying about where the money is going to come from, and you’re exhibiting symptoms of anxiety such as being unable to sleep at night, this is a warning sign it would be wise not to ignore.

Staff attitudes and morale are another measure of company health. Positive, forward-thinking and enthusiastic employees are a sign that a firm is probably in good shape. But if your employees are going about their duties in a lacklustre manner and morale has dipped, alarm bells ought to be ringing.

What to do when you spot the warning signs

If you believe you’ve seen the subtle signs of imminent cash flow problems, it’s important to take action as soon as possible.

Every day, our Business Recovery experts are talking to forward-thinking firms like yours, businesses who are acting now to secure their future success.

By speaking to us, you have access to a network of commercial funders looking to put money into firms with potential. This can happen through whatever mechanism is most appropriate.

Call today to speak with one of our Business Recovery specialists about your cash flow concerns on 01451 832533.