Online help to maintain a healthy cashflow

NatWest and RBS have launched a guide to help businesses improve their cashflow and provide an insight into what their bank will expect customers to have prepared when they seek funding.

NatWest research reveals that two fifths of SMEs have no formal cash management strategy in place, and that almost a third (29%) have taken no action at all to ease their cashflow issues. This online guide will act as a valuable tool to help businesses develop their cash flow strategy and is now easily accessible on both natwest.com and rbs.co.uk.    

As well as ensuring they are better equipped to secure finance from the Bank and speed up the application process for those seeking additional finance, the guide also provides working samples of charts, including cashflow forecasts, debt/creditor lists, profit and loss accounts and balance sheets.

Peter Ibbetson, chairman of business banking, said: “What often causes businesses to fail is not their profitability, but their cashflow. We have an open door policy in terms of being available to help customers discuss all manner of trading issues, and encourage our customers to get in touch with us if they have a change in their circumstances or need guidance on any matters that concern them.”

Top five Top five tips for trading through the economic downturn:

Cash is king – keep control of your cashflow by having the right management information and systems in place. They’ll allow you to act on warning signs before they become a problem.  Remember, Invoice Finance may be an answer to working capital problems

Talk to us – there is a world of support available to small businesses. We’ve got an unrivalled 2,300 locally based business managers offering customers free face to face advice. We’re also currently putting in place an experienced team of 500 to offer more intensive support to businesses facing heightened financial pressures.

Get paid – you must set clear terms of business and collect debts promptly. If you’re worried about being paid, then consider stage payments or even cash on delivery to reduce your risk of bad debts

Look at your costs – as sales fall, avoid taking on unprofitable business. Cutting your costs can provide you with the scope to reduce prices. If you take on big orders, you could be overlooking your smaller more profitable customers

Spread the risk – don’t just rely on one or two customers. In an economic downturn, all it takes is for one of your customers to move to a cheaper supplier and your business is no longer viable.  In past recessions, those that suffered were those that failed to go out and get new customers and those that succeeded were the ones that did.