This can be a crucial time of year for small businesses and their success when increased energy is being exerted to reach year-end goals. However, for many disaster is looming in the wings. Whilst so much attention is being expended on making sales, partying or even holidaying the old bête noire cash flow is temporarily forgotten.
Small firms in the UK should view the run-up to Christmas and the first few weeks of the New Year as one of the most dangerous times of the year to experience cash flow problems, warns IGF, one of the UK’s leading independent commercial finance companies.
With many small companies still using disparate software systems, often relying on spreadsheets, they are often unaware of the seriousness of their financial situation until it is too late. It was reported on Smallbusiness.co.uk in October that 70 per cent of businesses which go bankrupt are profitable when they close their doors … The figures speak for themselves: businesses that plan their cash flow needs once a year have only a 36 per cent survival rate over five years. Those who plan their cash flow monthly have an 80 per cent survival rate.
For many if would be beneficial thinking about implementing a solution with real time reporting. This would give access to up to the minute financial data; giving businesses early warning of impending danger.
However for many, in today’s difficult economic climate, making large capital expenditure purchases can be almost impossible to think about as finances are feeling squeezed. However, in opting for a solution that is in the “cloud” businesses can minimise their financial exposure.
Ideally the solution would also enable them to benefit from other business processes such as procurement, supply chain and customer relations Software such as SAP’s Business ByDesign offers companies the ability to deploy an integrated solution and pay a monthly subscription, allowing them to accurately forecast their IT needs with no hidden extras.
More importantly, once cash flow is under control, real-time reporting and an integrated will give companies the management information they need to aid their growth plans and to have a 360O view of their business.
About the author…
Caroline Atkinson is Director of Business Development at In Cloud Solutions.
For more information on how SAP ByDesign can help your business, please visit https://incloudsolutions.co.uk/
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