How to create financial resilience in your business t

Inflation, energy bills and low consumer confidence are creating a perfect storm for even the most well-managed businesses but there are things you can do to build in financial resilience during this period of extreme volatility.

Cash flow forecasting

By controlling money owed and purchases made, you can maximise the cash flow available. This means making contact with anyone who owes you money and selling off excess stock or inventories to generate cash. It goes without saying that greater care than usual is needed when offering credit to customers. If you have any non-essential overheads, review these and it may be necessary to decide to either cut or pause them. This is not always necessary and some services will be important to have in place so that you can adapt quickly when the economic climate improves.

Supply chain and stock

In the current environment, supply issues mean advance ordering has become the norm and many companies are holding stock as contingency. This has a big impact on cash flow. Where possible, avoid overstocking and identify suppliers who can deliver reliably with shorter lead times. It is also important to be mindful of the financial health of your suppliers as well as your biggest customers.

Focus your growth

In challenging times, it’s crucial to focus your efforts on improving the best performing parts of your business. It might be necessary to side-line products or services that do not generate good profitability, or which are break-even. The same applies to customers. If you have good customers, you will often generate more income more quickly if you focus efforts on developing and retaining them rather than investing more time in finding new ones. This isn’t always the case, of course, and it can depend very much on the sector you operate in.

Review funding

We cannot stress strongly enough the importance of having good management information (MI). Alongside this, look at different business scenarios and have an action plan for these. This kind of information and awareness will demonstrate resilience to banks and lenders, giving them greater confidence to support you. If you would like further information on our FD on demand service which focuses on preparing MI that allows you to make the best decisions please get in touch.

Talk to us



If you have any concerns or queries about cash flow, funding, profitability or anything else that could impact your financial resilience, we urge you to talk to us as soon as possible. We are always available to help, no matter how small your query, so there’s no need to leave it until our next scheduled meeting.