Protecting cash

Last updated Wednesday 22 April 2020

Protecting cashflow is for many businesses the primary focus of the moment. But what steps can a business take to protect and generate cash now to avoid hibernating their business?

Kreston Reeves offers the following practical measures:

• Seek a repayment holiday on existing debt facilities. Many banks are offering payment holidays of between one and two years with little additional information required.
• Manage your stock. Run-down existing stock to free up cash and be careful when purchasing new stock.
• Defer taxes. PAYE, NIC and Corporation Tax can be deferred through a time to pay arrangement with HMRC. VAT payments have already been deferred by HMRC.
• Seek a business rates holiday. Retail, hospitality and leisure sectors can get business rates holidays with eligible businesses being contacted by their local authorities.
• Look for grants available for certain sectors. Government has made available grants to be administered via local authorities.
• Defer rent payments. Approach and discuss rent deferment or rent holiday with landlords, even changing to paying monthly would likely help cash flow.
• Use the job retention scheme, this Government initiative offers an alternative to potential redundancies with the Government covering up to 80% of employees’ salaries.
• Collect your debtors. Chasing up payments due to the business is essential. Consider prompt payment discounts to accelerate cash receipts.
• Manage your creditor terms and payments. Carefully approach and discuss payment terms with suppliers.
• Review and reduce overheads wherever possible. Overheads can take longer to adjust in a business, but now is the opportunity to consider how overheads could be reduced and what steps would need to be taken.

How we can help

We have a team of debt advisory and corporate finance experts used to working with banks and other lenders and can support you with CBILS, CLBILS, and CCFF scheme applications. We understand how lenders are currently making credit decisions, and for CBILS loans above £250k particularly can help with your application.

Our restructuring and insolvency experts can advise businesses under stress about the options available to them.

And our tax experts are also be on hand to advise you on applications to HMRC for the Time to Pay initiative, for corporate tax advice, in particular around tax implications of debt restructuring and R&D tax claims. We also have VAT & Duty experts who can support you in revising your VAT position who have a suite of over 40 ideas where cash savings may be found.

Do call us on 0330 124 1399, via our enquiry form or speak to your usual Kreston Reeves contact.