In this tough economic climate, managing cash flow is vital. The saying “cash is king” could not be more true in times such as these. Businesses with a healthy cash flow are those more likely to survive periods of economic downturn. After all, cash is the life blood of a business.
It is reported that an unpaid bill of £420,000 contributed to the collapse of Haskell Woolfe Accountants Limited, a Manchester based accountancy practice. A report from the administrator of the company, John Bell of Clarke Bell, showed that the company was trading successfully until last summer. It is said that the substantial debtor failed to pay £420,000 owed to the company, resulting in the company being forced to reduce overheads. A winding up petition was subsequently presented to the court by HM Revenue and Customs.
Now is therefore as good a time as ever for businesses to look into their cash management process, even those businesses that may still be doing well despite the downturn to build a stronger business foundation for the future.
Professional help should be sought at the earliest opportunity where businesses are concerned about their financial position.
By commercial solicitor, Nicola Whittle