What is going on right now is completely unprecedented, and has caught an awful lot of us off guard and unprepared. Here are our top five tips for managing cash flow over the coming weeks:
1. Credit control
Time to really focus on credit control. Have a look at collecting those outstanding, and particularly older debts, sooner rather than later. Be willing to set up standing orders for outstanding debt, or even offer a discount for invoices paid before credit terms fall due. Make sure you are adhering to credit control procedures before taking on any new work.
2. Working capital review
In addition to debtors, it is essential to ensure your work in progress accurately reflects amounts that are likely to be recoverable. Ensure that there are regular reviews of WIP, irrecoverable amounts are written off or down, and that fee earners make billing important. Consider whether interim billing should be introduced, if it isn’t already.
3. Review expenses
Review whether there are any expenses which are non-essential. Could you be emailing more to save postage and stationery costs? Have you spoken to your bank, utilities and telecommunications suppliers about whether you are receiving the best deal available? Pay your suppliers on their due date, and not before.
4. Client relationships
Managing client relationships is key for longevity. Keep in contact with your clients. Ensure they know what is happening, what your plans are, and whenever this changes. Consider whether there may be opportunities for cross selling to other teams within your business.
5. Marketing
You need to continue to try and win new work. Consider your marketing plan. If fee earners’ work does reduce in the next few weeks, could their efforts be put to article writing, blogs, or social media?