During challenging times for your business, what is most vital is that your business keeps going. So long as your business has enough liquidity to keep going, the business will keep going and survive difficult times.

With many industries facing challenges now, here are some tips to help manage your cash flow.

Know Your Runway

The first step to handling any cash flow issue is to know how far you can stretch yourself with a reduction in revenue. A good measure of this is known as a ‘runway’, which is how long a company can last before it runs out of money.

According to the Office of National Statistics, 26 per cent of businesses said they had less than three months’ worth of cash reserves, so understanding how far your business can stretch is vital.

A good way to help with these calculations is looking at your company’s costs historically and creating a model for how long your current assets will last. We can produce a high-quality detailed Cash flow to help with your understanding of where you are going to and the risks associated with this and what needs to be done

Adjusting Your Business Size

The look of business has changed significantly in the last six months, and so it is important to go through and see just how much of the expenses you are paying for are still required.

This can include the number of full-time employees you have (and whether they can be moved to reduce hours using the Job Support Scheme, financing equipment you do not own yourself and considering downsizing your commercial space if possible if your staff are working from home.