38-43-cashflow.qxp 11/12/09 16:47 Page 42
~FINANCE~
‘In the early days, our business got into trouble by
having too much of a “spend-as-we-go” approach’
also meant that we don’t have big lumps of manage outgoings after the dotcom bubble 20) GO FOR THE MONEY
cash going out every quarter – which has burst. ‘In the early days, our business got into Working smart for your
been really useful.’ trouble by having too much of a “spend-as- sales, instead of hard, is
we-go” approach. Suddenly our cash flow crucial for cash flow.
15) CENTRALISE DATA dried up and we were faced with three Always focus on the most
For Forbes, having a customer relationship successive months of bills to pay, which profitable customer, not
management (CRM) system is crucial to nearly made the company go under. Now we the biggest, says Involved
driving more sales. ‘We spent £6,000 to have a separate bank account just for bills so Investors’ Daniels. ‘You
£7,000 on it but it has more than made its we won’t get bitten in that way again.’ need to go where the big
money back. It’s meant that all our staff are fish are and then redeploy
working to their maximum capacity and 18) EXTEND YOUR TERMS staff accordingly.’
aren’t wasting time doing unnecessary You could agree to pay a higher cost to a
admin,’ he states. supplier for extended terms. This is 21) REVIEW PAY STRUCTURES
obviously better for a cash flow blip rather Marion Tapp, director at Tristar Oilfield
16) LESS IS MORE than a long-term strategy, but it could work Services, says reducing salaries was the only
Staff may be more willing than you think to very well for getting you out of a hole. option left to ease cash flow. ‘We don’t have
accept a cap on the hours they can work. ‘As any frills as we already run a very tight ship
the process of recruiting and training people 19) TALK TO HMRC and there were no other things to cut. But
can be very lengthy, we didn’t want to make Don’t be in denial about your taxes. we didn’t want to get rid of our guys
redundancies and then have to re-hire once Launched last year, the government’s Time because we really value them,’ she says.
the upturn came,’ says Danny Cooper, to Pay scheme allows companies Instead, the directors had frank discussions
manager of architectural practice RLT Built experiencing temporary cash flow difficulties with staff, making it clear that either some
Environment. For Cooper, cutting the hours to defer their tax payments. Most businesses people would lose their jobs or everyone
staff were allowed to work seemed the agree a repayment time of six months or could take a 20 per cent wage reduction. ‘In
obvious option. ‘It gives us the flexibility of less, but you may be able to negotiate a the end, everybody, including the managing
moving staff back up to full-time once longer period. So far, 233,800 companies director, took a cut.’
things improve,’ he comments. have used the scheme. While certainly useful
as a tool to give your business breathing 22) DO IT YOURSELF
17) SEPARATE BANK ACCOUNTS space, the danger is that another wave of Emmy Scarterfield, owner of Emmy Shoes,
Marcus Brennand, founder of multi-media companies will go under when this tax says she had to cut costs when the price of
company Digital Marmalade, learnt to amnesty expires in 2010. imports increased. ‘We had planned to
42 BUSINESS XL
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