Being a small business owner is tough. Long hours, hard work, and sleepless nights are all side effects of running your own business. Add to this a global pandemic in 2020 and the options to apply for business grants and government support loans requiring knowledge of your business finances – has all highlighted the importance of Cashflow Management. Our blog below, collated with information from a Futrli White Paper, shows how LWA can use Futrli to help our clients be prepared and able to predict business performance at any time.
Why is cashflow important?
Researchers at the London School of Economics have said that the two biggest obstacles facing small businesses are access to financing options and poor financial management practises. According to Xero, 90% of small businesses that fail to do so because of cashflow management issues.
The average SME is almost £60k out of pocket at any given time due to poor financial management practises. This is having a huge knock on effect on the economy as SMEs account for 99.9% of all private sector businesses and 60% of private sector employment.
2020 has highlighted some shocking facts
Cash in the bank has never been as crucial as it is now while COVID continues to sweep through the country, threatening supply lines and pushing small businesses to their limits. The Office of National Statistics is reporting that 1 in 4 businesses has less than 3 months’ worth of cash reserve and 1 in 20 has no cash reserve at all - and these statistics are just the businesses that are still trading.
Across all industries, they have found that 1% of small businesses have permanently ceased trading and even now, many months after the initial lockdown, 10% we’re still not trading with no plans to re-open in the near future. Whilst, the Government has attempted to ease the cashflow concerns of SMEs, only 22% of businesses that applied for government backed loans have been accepted leaving many business owners to fend for themselves.
How can LWA & Futrli help?
As Futrli Certified Advisors, LWA’s expert team have access to vital tools and technology that could ensure your business survives through the fluctuating economy. FUTRLI Predict provides you with an early warning system by pulling through your existing transactions and balances from Xero or QuickBooks Online and analysing it with the same logic an accountant would; however within a matter of hours, rather than days.
We have helped many of our clients to quickly gather important information for their loan applications and furthermore, get approved for Coronavirus Business Interruption Loan Scheme (CBILS) or Bounce Back Loan Scheme (BBLS), allowing them to have the funds in their accounts to keep running their companies.
Being able to test drive your decisions
An accurate forecast also allows you to test current decisions as well as plan for future ones. Somethings that might seem like a no brainer at the time can have a butterfly effect on your finances down the line. For example; when to invest in stocking up your business, when to increase salaries, when to invest last month’s profits.
Predict’s forecast items allow you to see the real effect of any of these decisions, long before you make them. Testing these decisions allows you to be truly confident in the choices you make, even as the surrounding circumstances change.
We’re here to help you get through this
As we’ve learned in 2020, it can be a cruel world out there, and the cards can be stacked against you - but you are not alone. Speak to us about how we can provide the support you need and about getting your data loaded into FUTRLI. You and your business are too important to not use every tool in your arsenal to help illuminate the path ahead. There is still time to benefit from the government backed loans and the deadline for application is 31st January 2021.
Please contact our in-house Futrli expert, Matt Jones, if you’d like to find out more about how we can support your business get through the current economic climate and succeed. Call 0161 905 1801 or email matt@lwaltd.com.