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Financial Distress: Top Recovery And Avoidance Tips

At Calculated Accountants we pride ourselves on ensuring that our customers, ranging from start up businesses to small businesses throughout the UK; have the best possible support at all times. By providing professional bookkeeping services, tax and vat return support and a trusted and reliable payroll service we can help our clients keep their finances in the best state possible, offer advice on how to save money and avoid any impending disasters.

Having solid, trusted and reliable financial support can make all the difference however for many businesses; financial strain can still creep up out of nowhere. We have helped many struggling small businesses source much needed financing and get back on the path to success. Although it may seem like a daunting task, it isn’t impossible to raise finances and get your business back into shape.

Our team have put together some vital points that you may want to consider if you find yourself facing financial difficulty or perhaps want to pre-warn yourself to avoid hitting that brick wall...

  • Short Term – If you find that your business is struggling, one of the first things to consider is short term cash flow. Ensuring you can cover the short term costs is vital when attempting to turn a business around. Can you cover your daily expenses? Can you pay your current staff? Dealing with the short term is essential as it will allow you the breathing space to focus on the bigger picture.
  • Analysing Business State- This is often where an accountant can be of great benefit, managing your books and ensuring that outgoing expenses do not surpass your incomings is invaluable. Look at your finances and determine where you are incurring losses and what about your customers, is the number getting smaller? Knowing what is working and what isn't is crucial.
  • Team Weaknesses- Every member of your team should be there to help your business become a success. One weakness can cost you not only as a result of their minimal productivity but the salary you are paying out. Ensure that your team is up to scratch and as an employer you are getting the most from the money you are investing in them.
  • Viability- If your business is getting weaker, one of the main points to consider is viability. Have there been any drastic changes since you started up? Are you able to demonstrate to potential lenders how viable your business is and how it will continue to remain viable?  When it comes to raising finances you need to be able to prove that your business is a worthy investment and is capable of providing a return.
  • Advisors- Having the right advice is essential so ensure you have a good financial team behind you. Advice, support and professional knowledge can help you manage your finances and your entire business structure. Having a professional accountant from the word go who is not only dedicated but cares about your business may even potentially minimise your chances of reaching a distressed state.
  • Transparency- Tying in with point four, although understanding your financial position is essential, being clear about what you need and what it will be used for is even more important. Facing financial difficulty can always be daunting but by getting control of the situation and remaining transparent to your chosen lender you may actually improve your chances of receiving the required funding.

In the aftermath of an economic downturn, facing financial difficulty and having to raise finances is something many businesses have come across. Remaining vigilant, prepared and having the right support can ensure that you can tackle any problematic financial situations head on or avoid them altogether.

If your business is facing financial strain or perhaps if you just wanted to ‘stay ahead of the game’ hopefully our points will help. For a further chat on raising finances contact one of our team members today


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