Problems with cashflow are the most common reasons for business failure. In this checklist we suggest a number of straightforward activities that can be used to stem the bloodflow both immediately and in the near future and get your business back on track.

1. Stop paying out cheques until you understand what is happening
Vital if you suspect you will run out of money soon. Don’t allow any cheques to be paid without your authority.

2. Draw up a cashflow forecast
Analyse the cash flows down to a daily level of detail.

3. Analyse the gap between cash in and cash out
Be objective- if you are not 100% sure of receiving a cash inflow at a certain time then disregard it and plan for the worst case.

4. Request extra time to pay creditors
Most creditors will show understanding, especially if you let them know very early on.

5. Lease rather than purchase
For essential assets (vehicles, equipment, plant etc) purchases, leasing rather than purchasing will preserve cash.

6. Refinance assets to release capital
A variety of assets can be used to raise funds against e.g. property, vehicles, plant, equipment.

7. Reduce the time you have to wait for payment of invoices
Factoring or invoice discounting provides funds for invoices as soon as they are raised and avoids the 30 – 120 day wait for customers to settle their bills.

8. Win new contracts or scale up for a seasonal busy period
A variety of working capital loans and lines of credit can be utilised to enable the business to keep purchasing inventory in order to deliver increased revenue and new contracts.

9. Raise additional funds
Additional funds can be raised using a variety of security eg. Land and property mortgages, accounts receivable, stocks and bonds, life insurance and endowment policies. It is important to recognise that the lender will still be first and foremost concerned with the ability to repay the loan repayments regardless of the strength of security provided.

10. Use a Finance Broker to manage the finance raising activities for you
The full range of financial products and services are readily available to most businesses, however finding the right funder and the optimum combination of funders (in complex cases) can take up lots of valuable business time. A good broker will take the time to understand your business and take away the stress and worry of you having to find the time to implement these activities and often it is no more expensive than going it alone.