Moving forward...

Guide to Cash Flow

Welcome to yourfirst ‘Moving forward’ guide,wherewe hope to
support you through yourbusiness’ cash flowmanagement.

The most important element in ensuring yourbusiness survives is cash

flow, andwith the economy set to recoverthis coming yearit’s a big part
oflooking forward also. Efficient cash flowmanagementwill make sure
yourbusiness moves forward through the coming years and is able to
take advantage ofnewopportunities.

Cash flowis
the lifeblood of
everybusiness
Benjamin Apeagyei, Carat Promotions
Increase yourchances
Cash flowis absolutely no.1...
you could have invoiced out
but until it appears in your
bankaccount it is pretty
ofbeing paid on time much useless to you
Paul Redpath, Catalyst 2

70%
Due to the recent financial climate the number
of businesses having to actively chase invoices
is up by 70%

It’s good business to get to know your customers better by

Tip
making credit checks an integral part of your cash flow management
process. Monitoring your customer’s financial situations will ensure any
failures they have, don’t affect your business. Keep a look out for early
warning signs, such as people asking for extended credit terms -
simply ask them why

Todo... Set aside a specific time each month to chase outstanding payments

Moving forward...
Make getting paid easierwith Sage Pay, ourcomplete
online payment service that’s simple to manage and easy
to integrate. Find out more about Sage Pay
Forecasting & Planning, how important
are they to yourbusiness?

54% 54% of businesses believe the recession has made it difficult to

make strategic decisions

Keep an eye on your cash flow forecast to foresee any potential

problems so you can avoid them. Identify possible cash shortfalls and
Tip be sure your business is in a good financial situation before taking on
new commitments, such as opening new offices, employing new
people or even taking on new business

Use a warning signal in your cash flow

Todo... forecast, it will monitor times when you’re
close to your overdraft limits

Moving forward...
Predict the effect ofbusiness decisions and create
comprehensive financial forecasts foryourbusinesswith
Sage 50 Forecasting. Find out more about Sage 50 Forecasting
Are trackingand reports
systems useful?

Did you know…

Plan
Research has shown that a clear business
plan or strategy based on data is a key ...you can spread
growth factor for small businesses the cost of your
Sage software
Having easy access to meaningful reports with interest free
is like a health check for your business. With Direct Debit
Tip such reports you can analyse new opportunities
and spot risks before they turn into problems. They
offer top-level overviews and access to in-depth facts
and figures to help you understand your business and
grow in the right directions

Todo... Use a reports system to make new business decisions,

turning relevant figures into insights for your business

Moving forward...
Sage InstantAccounts andSage50 Accounts offergreat reporting
tools. Find out howthe latest versions ofSage Instant Accounts
and Sage 50 Accounts can help you and yourbusiness
How important is timing?
We’ve found that most businesses close due
Efficient to problems caused by inefficient cash flow
management rather than anything else

A healthy cash flow situation is often a question

of timing. As income and expenditure cash flows

Tip don’t always happen at the same time it’s a

good idea to negotiate with your suppliers and
creditors about monthly payments. Remember,
paying for things in advance can be a huge
drain on your cash flow

Todo... Produce a prioritised suppliers and creditors

list for those needing quick payment

Moving forward...
Centraliseyourcontactinformation and prioritiseyoursuppliers
and creditorswith the latestversion ofACT! bySage, ourcontact
management system. Call 0800 694 0569 orvisit the Sage Store
to find out more about ACT! by Sage
Avoid common cash flowmistakes
85% 85% of the reasons given for non-payment by business customers
relate to invoice queries

Incorrect sales invoices aren’t as uncommon as you might think.

To make sure your invoices are completed correctly, set them up in
Tip accordance with HMRC and all relevant VAT requirements and you’ll
reduce the amount of incorrect sales invoices sent to customers -
resulting in less late payments being made

Be fully aware of legislation changes so you

Todo... stay compliant with HMRC guidelines and VAT
requirements
Always ensure you have
a good control ofyour
cash flowand knowin
advancewhen these
could be an issue
Andy Palmer, Sage

Moving forward...
An easywayto staylegislativelycompliant iswith
SageCoverand SageCoverExtra. Find out more about
SageCover and SageCover Extra
 To do list...
1 Set aside a specific time each month to chase outstanding payments
2 Use a warning signal in your cash flow forecast, it will monitor times
when you’re close to your overdraft limits
3 Use a reports system to make new business decisions, turning relevant
figures into insights for your business
4 Produce a prioritised suppliers and creditors list for those needing
quick payment
5 Be fully aware of legislation changes so you stay compliant with
HMRC guidelines and VAT requirements

Lookforward to
ournext online guide,
Moving forward...
Guide to Legislation

To find out more...

...about howour software and services can helpyou to
maintain a healthy cash flowcall us on 0800 33 66 33