At times like this cash really is king and according to Business Link, not doing the basics such as a regular cash flow forecast increases the chance of business failure by 45%. 

Ten tips for financial health: 

1. Cash flow and financial planning should be on your management meeting agenda’s every time. 

2. Regularly update your cash flow forecast. 

3. If you have a conflict in choosing between increasing profits or increasing cash, take the cash route. 

4. Watch your borrowing covenants carefully so you know when/if you are likely to be in breech. 

5. If you have a review with your bank or investors, prepare thoroughly. 

6. Keep your bank informed in advance of getting into difficulty. 

7. Consider all alternative sources of finance. 

8. Keep in touch with potential funders before you think you might need them. 

9. If your business survival is under threat, think of assets that can be sold, new injections of cash and take professional financial and legal advice. 

10. If you are cash rich, consider ways of using the funds for the long term benefit of your business. 

You can read my personal blog at http://finance-director.blogspot.com/

 John Toppin at www.nomizon.co.uk 

 James Cooke at www.jamescookecoaching.com

According to Experian’s current late payment index, cash from your clients should be pouring into your business right now. Their figures are showing the biggest improvement in days in debtors since late 2007.

The south west comes out top with only 18 days beyond terms whilst in London things are not so good with settlement taking 27 days beyond terms. As far as sectors are concerned, the worst payers are in property with 39 days taken beyond terms on average. Remember terms are usually 30 days for many businesses so property is taking 69 days on AVERAGE according to Experian.

Have a look at the full survey at http://www.experian.co.uk/ and check the scores versus your clients to see how you are doing by sector. Remember to add your credit terms to the numbers in the survey!

As a consultant Finance Director specialising in creative, marketing and professional firms I suspect that you may see that your clients are performing worse than the survey is leading you to expect.

There are a number of reasons for this, but don’t lose heart, there is actually a great deal that you can do to improve the speed with which you can turn work done for clients into cash in your bank by improving your internal procedures.

Engage in the debate with financial management advisor John Toppin MA FCA and strategic advisor and business coach, James Cooke.

John Toppin is a specialist consultant finance director and ned for marketing,creative and professional firms.

You can check my credentials at http://www.linkedin.com/in/johntoppin

You can read my personal blog at http://finance-director.blogspot.com/

 John Toppin at www.nomizon.co.uk 

 James Cooke at www.jamescookecoaching.com

As you will be only too aware, cash flow forecasts are a vital tool for running your business - especially at times like these.

Sadly, many businesses are incompetent at producing cash flow forecasts - especially architects.

These are some reasons why your cash flow forecast might be rubbish: 

• Your cash flow forecast is based on your budgeted profit and loss account.
• Your cash flow is based on an inaccurate profit and loss forecast.
• Your cash flow is not based on movements in your balance sheet.
• You prepare the cash flow forecast monthly when you need to do it weekly.
• Your cash flow forecast does not show assumptions.
• You don’t check actual cash flow versus the forecast.

If your cash flow forecast ticks any of the above boxes then it can and should be revised - you will have a better grasp of your business and you should be able to identify areas to improve on.

For a little more on why good cash flows are important see my article in the September edition of RIBA Journal:

 http://www.ribajournal.com/index.php/feature/article/capital_gains_AUGSEPT09/ 

Engage in the debate with financial management advisor John Toppin MA FCA and strategic advisor and business coach, James Cooke.

John Toppin is a specialist consultant finance director and ned for marketing,creative and professional firms.

You can check my credentials at http://www.linkedin.com/in/johntoppin

You can read my personal blog at http://finance-director.blogspot.com/

 John Toppin at www.nomizon.co.uk 

 James Cooke at www.jamescookecoaching.com