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Riding Out the Recession

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

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  1. Riding Out the Recession Business Recovery and Cash Flow Management Brian Denton iems ltd

  2. Business RecoveryIntroduction • Why do businesses start?

  3. Business RecoveryIntroduction • Why do businesses start? • It is a strength to recognise that external help is needed, not a weakness.

  4. 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?

  5. 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.

  6. Business RecoveryThe Process • Initial assessment of the companies position.

  7. Business RecoveryThe process • Initial assessment of the companies position. • Analysis of the company’s present financial position.

  8. 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.

  9. 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.

  10. 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.

  11. Business RecoveryThe processBreakeven Calculation & Price

  12. Business RecoveryThe processBreakeven Calculation & Price

  13. Business RecoveryThe processBreakeven Calculation & Price

  14. Business RecoveryManaging Cash Flow • Collect outstanding customer debts

  15. Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery.

  16. Business RecoveryManaging Cash Flow • Collect outstanding customer debts. • Invoice on the same day as delivery. • Reduce or eliminate credit given to customers.

  17. 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.

  18. 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.

  19. 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.

  20. 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.

  21. 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.

  22. 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.

  23. Business RecoveryManaging Cash Flow

  24. Business RecoveryPrevent a Problem Turning into a Crisis • Have a business improvement action plan in place and act upon it

  25. 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

  26. 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

  27. 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

  28. 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

  29. 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

  30. 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

  31. 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

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