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Riding Out the Recession. Business Recovery and Cash Flow Management Brian Denton iems ltd. Business Recovery Introduction. Why do businesses start?. Business Recovery Introduction. Why do businesses start?
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Riding Out the Recession Business Recovery and Cash Flow Management Brian Denton iems ltd
Business RecoveryIntroduction • Why do businesses start?
Business RecoveryIntroduction • Why do businesses start? • It is a strength to recognise that external help is needed, not a weakness.
Business Recovery Introduction • Why do businesses start? • It is a strength to recognise that external help is needed, not a weakness. • Why do companies get into difficulty?
Business RecoveryIntroduction • Why do businesses start? • It is a strength to recognise that external help is needed, not a weakness. • Why do companies get into difficulty? • The key to successful business recovery is to act early – as soon as a problem is identified.
Business RecoveryThe Process • Initial assessment of the companies position.
Business RecoveryThe process • Initial assessment of the companies position. • Analysis of the company’s present financial position.
Business RecoveryThe process • Initial assessment of the company’s position. • Analysis of the company’s present financial position. • Develop an understanding of the nature of the problem/s that the company has and the consequences.
Business RecoveryThe process • Initial assessment of the company’s position. • Analysis of the company’s present financial position. • Develop an understanding of the nature of the problem/s that the company has and the consequences. • Develop a plan to deal with the problem/s and its consequences.
Business RecoveryThe process • Initial assessment of the company’s position. • Analysis of the company’s present financial position. • Develop an understanding of the nature of the problem/s that the company has and the consequences. • Develop a plan to deal with the problem/s and its consequences. • Prepare a financial plan comprising P&L, Cash Flow & Balance Sheet, phased by month.
Business RecoveryManaging Cash Flow • Collect outstanding customer debts
Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery.
Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery. • Reduce or eliminate credit given to customers.
Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery. • Reduce or eliminate credit given to customers. • Liquidate surplus stock and other assets.
Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery. • Reduce or eliminate credit given to customers. • Liquidate surplus stock and other assets. • Extend credit taken from suppliers. Renegotiate terms & where possible extend credit limits.
Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery. • Reduce or eliminate credit given to customers. • Liquidate surplus stock and other assets. • Extend credit taken from suppliers. • Defer HM Revenue & Customs payments by agreement.
Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery. • Reduce or eliminate credit given to customers. • Liquidate surplus stock and other assets. • Extend credit taken from suppliers. • Defer HM Revenue & Customs payments by agreement. • Consider Factoring or invoice discounting.
Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery. • Reduce or eliminate credit given to customers. • Liquidate surplus stock and other assets. • Extend credit taken from suppliers. • Defer HM Revenue & Customs payments by agreement. • Consider Factoring or invoice discounting. • Sell and lease back essential assets.
Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery. • Reduce or eliminate credit given to customers. • Liquidate surplus stock and other assets. • Extend credit taken from suppliers. • Defer HM Revenue & Customs payments by agreement. • Consider Factoring or invoice discounting. • Sell and lease back essential assets. • Reduce overheads and direct costs wherever possible.
Business RecoveryPrevent a Problem Turning into a Crisis • Have a business improvement action plan in place and act upon it
Business RecoveryPrevent a Problem Turning into a Crisis • Have a business improvement action plan in place and act upon it • Prepare a financial forecast / budget
Business RecoveryPrevent a Problem Turning into a Crisis • Have a business improvement action plan in place and act upon it • Prepare a financial forecast / budget • Keep management accounts up to date on Sage / Quick Books etc
Business RecoveryPrevent a Problem Turning into a Crisis • Have a business improvement action plan in place and act upon it • Prepare a financial forecast / budget • Keep management accounts up to date on Sage / Quick Books etc • Compare actual performance with budget
Business RecoveryPrevent a Problem Turning into a Crisis • Have a business improvement action plan in place and act upon it • Prepare a financial forecast / budget • Keep management accounts up to date on Sage / Quick Books etc • Compare actual performance with budget • Spend time monthly analysing your management accounts
Business RecoveryPrevent a Problem Turning into a Crisis • Have a business improvement action plan in place and act upon it • Prepare a financial forecast / budget • Keep management accounts up to date on Sage / Quick Books etc • Compare actual performance with budget • Spend time monthly analysing your management accounts • Address areas of under performance
Business RecoveryPrevent a Problem Turning into a Crisis • Have a business improvement action plan in place and act upon it • Prepare a financial forecast / budget • Keep management accounts up to date on Sage / Quick Books etc • Compare actual performance with budget • Spend time monthly analysing your management accounts • Address areas of under performance • Don’t ignore problems, they are not likely to go away
Business RecoveryPrevent a Problem Turning into a Crisis • Have a business improvement action plan in place and act upon it • Prepare a financial forecast / budget • Keep management accounts up to date on Sage / Quick Books etc • Compare actual performance with budget • Spend time monthly analysing your management accounts • Address areas of under performance • Don’t ignore problems, they are not likely to go away • If in doubt, seek external advice from your bank / accountant / Business Link