Improve cashflow by categorising your supplier base into three areas

Financing-and-Non-financing-solutions-for-SME-cash-flow-problemsThroughout this time of uncertainty, the EFM team would like to share some practical guidance and support with our readers to ensure your business stays strong and above the water throughout the pandemic.

This week, EFMs Group Managing Director, Finance Director and Growth Partner, Gary Jesson, shares his tips around improving your cashflow management.

Every business owner should categorise and challenge their supplier base into 3 areas to preserve or improve cashflow:

Not essential – typically this includes those regular credit card or bank items for apps that you never use, membership subscriptions – switch these off immediately and preserve your cash.

Nice to have in normal circumstances – typically these include staff benefits such as gym memberships, fruit boxes, office cleaning, office copier, virtual office memberships, new vehicles – turn these down (weekly to monthly?), defer them or switch them off and re-activate once the situation improves.

Essential – this will mainly include product suppliers  – if they are essential to you then you are likely to be essential to them – talk to them and see how you can work together for mutual benefit –e.g.  if they have stock which you need and they cannot sell, then maybe consider trading on a consignment basis so everyone gets paid when the end customer pays.

For practical advice and support around improving your company’s cashflow, contact the EFM Expert team via clientcare@efm.uk.com or call 01582 516300.