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Why now is the right time to look at your business cashflow


The COVID crisis has brought into sharp focus the importance of cashflow reporting and forecasting to businesses.  There are almost 6 million small businesses in the UK and the sad fact is that a number of them are unlikely to survive the crisis.  For those that do, an understanding of what your future cashflow looks like is going to be crucial now more than ever.

The term ‘unprecedented’ is in itself facing unprecedented usage during this crisis but it sums up the trading conditions businesses are going to face over the next few years as the lockdown is eased and the terms of Brexit are finalised.  An understanding of cashflow and the ability to react quickly to changing conditions could allow your business to survive and thrive where your competitors struggle.

Forecasting cashflow can be daunting and time consuming.  Historically many business owners have neglected it as long as the business was generating profits or until they faced a cash shortage.

The main benefits of the move to cloud accounting packages like Xero have been the simplification of accounting tasks and the availability of live data through bank feeds and automated invoice scanning.  This has made it quicker and easier than ever to assess cashflow and a number of cashflow apps have emerged that will integrate seamlessly with your accounting software.

Fluidly is an app that has proven popular because of its use of artificial intelligence to analyse historic data and forecast future cashflows.  This means that a basic cashflow forecast can be prepared in minutes and then tailored as necessary by business owners or in conjunction with your accountants.  Changes to the forecast are then reflected in real time as debts are collected and invoices raised or paid.

Of course, knowing your cash position is one thing, but another crucial feature of Fluidly is that it also gives you the tools to improve it through automated credit control and its intelligent chase feature.  This breaks down customers by their typical payment behaviour and the amounts outstanding, allowing customised collection reminders and scheduled calls.  Simply put, it prioritises your credit control tasks, clearly identifying who to chase and when to give the maximum boost to your cashflow.

In a period of uncertainty the ability to adapt is vital.  Fluidly’s new goal planner feature allows the creation of multiple Scenarios to show, for example, the impact of new borrowing and changes in staffing levels.  

The future is uncertain and whilst cashflow forecasting alone will not guarantee success, it is a vital tool that business owners can no longer afford to ignore. 

If you are interested in finding out more about Fluidly, please contact our Head of Management Systems Richard Woolgar on 07715214751 or email richard.woolgar@armstrongwatson.co.uk

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