Cash is King
After some recent discussions with potential clients, the one thing they have all in common is that they are experiencing major cash flow problems.
Another thing they have in common is that the business owners are somewhat unsure as to how this has happened. In all cases there has been some contraction in business activity and profits are somewhat smaller than they were twelve or eighteen months ago.
What we have observed in our experience with both current and prospective clients, is that as the level of business activity decreases for a few months or longer, the level of expenditure remains the same or even increases, which means that usually any excess funds are used in funding that difference for a period of time. Some businesses naturally increase business activity and this scenario goes unnoticed, however some businesses are less fortunate and all too quickly they are in the grips of a cash flow crisis.
Usually this cash flow crisis manifests itself when ATO lodgements and payments are due, as these are again usually significant amounts that the businesses owe. This leaves the business owner hunting for any and every spare cent and, in most cases, sees the business owner having to dip into their own pocket to help settle the debt.
We always encourage business owners to try to keep in mind the amounts that they owe to the ATO as these can quickly build up over time and become overwhelming amounts and in some cases debilitating for the business. Obviously we can help with this with our tools and methods.
Get in touch if you have any concerns about the cash position of your business. The sooner you do, the sooner we can help!