As anyone with a business will already be fully aware, cashflow is vital. Having a steady flow of cash in is important – but having more flowing in than flows out on bills, supplies and overheads is crucial. Cashflow problems, caused by a lack of work or delays in getting paid cause most business failures.
It is not only businesses that suffer. You need your personal cashflow to come in reliably and to cover all your bills and commitments too.
At Continuum we look at ways to manage both your personal and your business cashflow – and see where the same principles apply to both.
How healthy is your cashflow?
On a personal basis, this is a little harder, because most of us don’t have our personal finances quite so efficiently monitored. Actually, we can use an app on our smartphones to log our everyday spending, but even if we use a notebook and pencil tracking all the little costs is important – because they can soon add up.
Successful small business owners monitor their cashflow statements monthly, weekly and even daily. Online accounting software makes this easy. Not only can you see what has come in and gone out, you can generate alerts to show if your income is keeping pace with your expenses– or if your cash is steadily running out.
If your personal or business income exceeds your outgoings, all is well. If you are spending more than you bring in, you need to do something about it, before your cashflow runs dry.
Cut your costs
We are aware of the big regular bills, the mortgage, council tax, and car payments – or the payroll. But we miss the little things that cause funds to leak away.
The first step to managing your personal or business cashflow is to plug the gaps where the money is leaking away. Cut the subscriptions you don’t use, and the little treats that have become habits. In business, look at your inventory. Are you bringing in stock or supplies you don’t need, or paying overtime for work that could wait?
Cut your commitments
You can cut the small expenses yourself – but the big savings come by taking a fresh look at your large scale commitments.
At home, your mortgage can be one of your biggest costs. At work, your finance – asset finance for your equipment, working capital loans, business development funding – can be the major drain.
You may be able to pay less for your mortgage for example. Re-mortgaging – finding a better deal to replace your current mortgage, using it to pay off your existing lender – could help you enjoy lower interest rates and reduced monthly repayments.
Getting expert help with a mortgage is essential, and at Continuum we can search the entire lending market to find the best deal for you.
If you have a commercial mortgage on your business premises the same solution could apply.
Making a cashflow surplus work
Of course – in business or in your personal life, you might be in the fortunate position of having a cashflow surplus – more money coming in than you need for your short term, or even your longer-term needs.
Simply leaving it in the bank may not be a sensible option, with interest rates at an all time low.
Fortunately, at Continuum, our leading cash management tools can help find the best solutions for your cash surplus. There are plenty of opportunities in the markets to put your surplus cash to work, either for your business or for you – and if it is your personal cash that is gathering dust and very little interest, it could be time to look at making the most of your ISA allowance.
Get some expert help
Getting professional help to manage your business or personal cashflow can be vital.
At Continuum, we have many ways to provide that help. We can give you the latest financial news with our weekly education mailer and regular updates. We can provide expertise and market knowledge – but above all, we can provide personal help from an expert financial adviser.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to a suitable financial planning or investment strategy, you should seek independent financial advice before embarking on any course of action.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you re-mortgage.
The Financial Conduct Authority does not regulate deposit accounts and some aspects of Commercial Mortgages.
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Book an initial consultation with one of our independent financial advisers or call us on 0345 643 0770 if you would like to discuss further.
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