Cash flow truly is the undercurrent that carries our personal finances, lifestyle or business forward. As we find ourselves in a high inflation environment while still caught in the wake of the COVID-19 pandemic, cash flow remains pivotal to our ability to endure, move forward and enjoy both personal and professional success.

For many, the undulations caused by the pandemic and the economic climate mean that they are navigating new challenges and re-routing their cash flow strategies. In this article, we take a look at the challenges that businesses face with cash flow, and how financial advice professionals can help map a free-flowing cash path to fortify your financial future.

Cash flow overview

Being such a prominently discussed topic in business and finance can lead some people to overcomplicate their understanding of cash flow. While the factors impacting cash flow can be complex, cash flow (put simply) is the money that you have coming in from revenue, and your outgoings.

Perhaps obviously, when the balance of these two is askew, or there are unexpected factors that impact either the incoming or outgoings of cash, which can be not only be stressful, but have lasting consequences on our personal or professional finances.

Cash flow challenges in business

Even the most profitable of businesses can crumble if their cash flow is not managed effectively. If you’ve experienced challenged cash flow, you may be familiar with some of the implications, such as an inability to pay suppliers, self-sabotaging personal cash flow by paying yourself too little, late debt payments, unpaid staff wages or even loss of contracts.
Many of our business clients, regardless of the size of their business, report common factors that impact their cash flow.

Expenses that get out of hand

It can be easy to focus all of your time and attention on your customers, staff and business growth, while your expenses quietly creep up a level that’s unsustainable. However, unexpected expenses also have a lot to answer for when it comes to causing a cash flow crunch in businesses and personal finance, alike.

Having a rigorous expenses tracking process is vital for both personal and business cash flow. Ensuring that you can effectively project future expenses and account for unexpected expenses can be key to ensuring that your outgoings don’t get out of hand.

Slow paying customers

Do you experience a delay in your receivables? Often, slow-paying customers can cause cash flow hiccups that flow on into other areas of the business. Consistency around your policies and procedures, as well as being transparent with your customer base on when payment is expected can help combat the cash flow interruptions and save you wasted time on chasing up unpaid invoices.

3. No accounts receivable collection plan for non-payment

Speaking of unpaid invoices, the cost and time spent recovering unpaid invoices from a delinquent customer can escalate rapidly. Having a standard process is the best way to ensure that unpaid invoices don’t slip through the cracks. Automated reminders and a set time period where it’s handed over the collections agencies can take the onus off you, and ensure that your invoice is recovered.

4. Uncertainty over future cash flow

It may come as no surprise that in order to understand what your cash flow is likely to do in the future, you need to spend the time looking at what you anticipate to happen within your business. Of course, no one can predict the future, however cash flow projections that detail your expected revenue and expenses, while taking into account the ebbs and flows of a seasonal industry, can provide a base for you to build your business plans upon.

Overcoming cash flow concerns with CFV Services

No matter if you’re a business, professional or family, CFV Services can help analyse your cash flow and provide long term strategies to unlock your financial potential — now and into the future.

Reach out to the team today to find out how.


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