Cashflow Advisory

A company can survive a series of poor trading results, but it only takes one cashflow disaster to cause a corporate failure. Unfortunately this is an all too real danger that many viable businesses face at the start of 2009.

When a cashflow problem takes hold, it immediately becomes the most important issue a company has to address. The seemingly hopeless situation erodes confidence and can create a highly negative work environment. With access to additional credit finance tightening, options can appear limited.

We believe that even an apparently dire situation can be turned around if the underlying business has sufficient potential. Here are seven reasons why hope should not be forsaken.

1. There is a cashflow problem but the business is still viable.

2. The company has survived this far, without need of intervention.

3. Financial backers will not benefit from the company going under.

4. Creditors have a vested interest in the company’s survival & success.

5. It’s an good opportunity to cut out negative activity hurting the business.

6. These are challenging times for many businesses, so you are not alone.

7. The company will be in a stronger position for surviving the experience.

We can take control of the cashflow issue, freeing up management to concentrate on the day-today running of their business. With a positive resolve to change and support of your stakeholders there is every chance of success.

Start of recovery project: (example)

Week One

• Form a small taskforce team with the backing of MD.

• Arrange a meeting with financial backers.

• Introduce a two-week hold on AP payments.

• Temporarily suspend all delegated authority.

• Communicate an internal ‘business as usual’ message.

• Establish the facts regarding the financial situation.

• Present draft strategy to rectify cashflow problem.

Michael Gray

‘I have experienced first hand the stress that cashflow difficulties can cause a company. An obsession with chasing cash receipts overtakes good business sense. There can be too much reliance on new customer deals to solve the company’s existing problems.’