Displaying items by tag: cash flow

New website puts SMEs in control of their finances

We’re really excited to launch our brand-new business calculator, designed to help SMEs get on top of their finances.

Garrod Beckett’s free online Business Equation tool helps you produce a budget with predicted profit or loss based on the figures you put in. It can be used to calculate the current health of your business, to create a business plan, or explore the impact of different financial scenarios on your business.

The tool comes as part of our new website which is designed to make it easier for businesses to get the information and support they need. The website revamp makes it simpler to navigate and offers practical tools and resources all in one place.

Paul Garrod, Owner and Director of Garrod Beckett, said: “Many people find the financial aspects of running a business hugely daunting and complicated, which is why we want to make things as easy as possible. 

“Our aim is to help SMEs to thrive by supporting them to manage their finances effectively. We offer practical tools alongside expert insight, so that people are empowered to make informed decisions about their businesses. 

“The Business Equation tool helps you map out sales and costs across the year, to give you an overview of business performance. And it allows you to try out different numbers, so you can see what could happen if you raised prices, bought new equipment or took on extra staff. That knowledge is vital if you want to protect and grow your business.”

The tool includes an indicative cash flow projector which demonstrates the need to have the right amount of cash in your business at the right times to cover your costs. It shows you a basic cash flow scenario based on equal sales and costs throughout the year - but these are different for every business, so you need to consider the flow of your income and when you have to pay for things like rent and rates.

Paul continued: “Cashflow is the lifeblood of every business. But sadly, many businesses fail because they run out of cash to cover their costs. If you don’t have a proper handle on it, financial issues can escalate very quickly. The tool gives you a flavour of cash flow but it’s important to get expert advice on how much cash you need to keep in the system and the timing of payments to make sure your business is secure throughout the year.”

The Business Equation tool is just one of a number of practical resources we’ll be sharing to help boost the success of SMEs. And we’d love to hear how you get on with it.

You can try out the Business Equation tool here. If you would like any help, or to discuss how to customise the tool for your business, please don’t hesitate to get in touch.


Published in Our Blog
Tuesday, 11 February 2020 12:16

Why cashflow is more important than profit

Top tips to get your business finances in shape

Have you started the year with renewed ambition to grow your business? If so, like many other business owners, you’ll probably be planning ways to increase your profits over the coming months.

After all, a healthy profit makes for a healthy business, right?

Unfortunately, that’s where many businesses get caught out.

The truth is, it’s cashflow that’s far more likely to make or break a business. And even profitable businesses fall down because they don’t have a handle on this vital lifeline.

According to the Office of National Statistics, cashflow issues are responsible for up to 90% of business failures.

So what is cashflow, and how can you manage it to make sure your business stays healthy and is able to flourish? We look at the key things to remember.

What is cashflow?

Simply put, it’s money that comes in and goes out of your business. It’s the dynamic ebb and flow of business funds. It’s what comes in from your customers buying products/services, investment etc. and what you pay out on expenses such as supplies, rent, staff costs, assets, insurance, tax etc.

What causes problems with cashflow? 

The main reason for cashflow problems, is an issue of timing. It can be hard to balance your incomings and outgoings over the year, particularly if the numbers fluctuate unexpectedly. And the key to cashflow is having enough money in the business at the right times to cover your costs – what’s known as being in ‘positive cashflow’.

Problems can occur for all sorts of reasons, such as:

  • when there is a big gap between doing the work for a project and being paid
  • when suppliers demand payment by a fixed time after delivery
  • when you have to pay for stock, staff and other costs before your client pays you
  • having to pay large costs up front, such as rent three months in advance
  • if you have a seasonal business which makes a stonking profit for part of the year but is very quiet for the rest of the time
  • if you lose a key client, while your overheads remain the same

Even when you are ready to expand your business, cashflow can bite you on the bottom. Such as when you need to invest in some equipment to offer a new product but you won’t start to reap the financial rewards for many months after you’ve bought it. It’s the same with taking on more staff, the costs can hit you way before you start to benefit from the extra resources.

So, unless you’ve planned your cashflow well, you could find yourself in a sticky situation pretty quickly. 

How do you manage business cashflow?

The good news is there are some simple steps you can take to manage your cashflow - and we’ve created a nifty online tool to help you keep on top of your business finances. 

  1. Work out a simple budget for the year. What are you predicting to bring in through sales and other income sources? What are your fixed costs? What variable and one-off costs might you need to cover? By listing these out, you can calculate your predicted profit/loss and you’ll have the information you need to plan your cashflow.

Pro tip: Why not try our online business equation tool which quickly calculates your profit/loss based on the numbers you put in, allowing you to try out different financial scenarios. It also automatically creates an example cashflow projection.

  1. Create a cashflow forecast by using the predicted income and costs from your budget and mapping them month by month across the year. You’ll know when certain things come in/go out, so put them in. And add other expected/potential costs as accurately as you can.
  2. Take some time to look through the figures and see when your pinch points might be. This means you can make smarter business decisions and take action before any problems occur – such as knowing when you need to boost sales, when to chase up late invoices, reduce costs etc. It will also show you when you can afford to re-invest in your business.
  3. If your forecast shows you’ll need a cash injection at a particular point, you may wish to meet with your Bank Manager to arrange an overdraft or loan. You are more likely to get this agreed if you have a budget and cashflow forecast in place as it shows you have considered all financial factors and that you are on top of planning the future of your business.
  4. Don’t forget to re-visit your cashflow forecast regularly to make any adjustments and keep a check on how things are going.

So, while it’s natural to want to keep a close eye on your profits, it’s vital to get a grip on your cashflow. As the lifeblood of your business, it’s the very best way to keep your business healthy in 2020 and beyond.

If you need help working out your budget or cashflow, please just drop us a line at This email address is being protected from spambots. You need JavaScript enabled to view it.


Published in Our Blog