Put simply, cash flow issues occur when a company’s outgoing payments are higher that its incoming payments. Short-term cash flow difficulties are relatively common and can be dealt with using simple remedies, such as slowing down the rate at which creditors are paid or ‘creditor stretching’.
However, long-term cash flow problems can be more difficult to deal with. They may result in the company failing one of the key tests of insolvency and being unable to pay its debts as and when they fall due.
There can be many reasons for poor cash flow, these can include:
Slow payment of invoices/debts due
Lack of sales
Most of these can be easily identified and rectified by a relatively quick and simple review and you should contact us for further advice and support.
Once the problem has been identified there are many options available to improve cash flow, such as: