Holden Associates – Accountants & Business Advisers Blog

Some financial do’s and don’ts for the recession:

1. At very meeting discuss, review, update and act on information concerning cash flow, have a set of projections incorporating a cash flow statement that you can refer to, update them if needed.
2. If there is a conflict between cash flow and profitability then make sure cash flow wins every time, sometimes selling stock at a reduced price does not achieve the desired GP %’age but it does achieve cash flow, money in the bank.
3. If you have bank lending then make sure you stick to the terms closely, constantly review your position, do not breech the terms or you may find the bank turns hostile.
4. If your bank lending is due for review, make sure you are prepared for this meeting, have up to date financial projections in place, take details of confirmed forward orders etc.
5. Have you got any assets that are not being fully utilised, maybe it is time to consider selling them off to realise the capital tied up in them, you may be able to sell them and lease them back again if they are needed.
6. Don’t wait until you are in financial difficulties before you talk to someone, keep everyone in the loop, from financiers to suppliers.
7. Consider every source of finance, not only the banks but also family and friends, if you have a good business they may want to invest.
8. If you are one of the few who are cash rich, then you should be looking to make this money work for the business with a longer term view, now maybe the time to buy that competitor, at a reduced price.

Operating in a recession is not easy, but keeping an eye on the finances makes it easier to plan.