If there’s one thing businesses have learned in recent years it’s that financial shocks can come from anywhere at any time. Nobody has developed an economic crystal ball that tells us when they’re about to happen – but happen they will.
It doesn’t have to be a big global event. It might simply be a large customer suddenly going under. In 2018, the collapse of Carillion is estimated to have affected 75,000 jobs in their supply chain.
So if we can’t see an economic shock coming, what’s the answer? It’s building resilience. And it’s something any business can do.
The wise business owner knows that the growth curve doesn’t keep heading upwards forever. They realise that downturns and recessions have many potential causes that are outside of their control.
So focus on the things you can control and build a strong financial foundation.
How can you improve business financial resilience?
You can make your business more resilient by:
- Managing cash flow.
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- Keeping on top of receivables.
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- More detailed financial planning.
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- Having regular reviews of your business finances.
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- Minimising debt – or better still, building a cash reserve.
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- Doing due diligence on large customers.
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- Relentless cost control – even in the good times.
Business owners tend to worry less about cost control when they’re growing and profitable. Management accounting helps maintain a proper focus on costs and profitability across your business.
You can then eliminate waste, fund investments without taking on more debt, and build up reserves to help you withstand the financial shock that will inevitably come.
Not all accountants offer this advice, or the highly targeted reporting needed to build resilience. Nor do they know enough about your business to make it all meaningful and actionable.
That’s where Rosy Jeffery Accountants are different. If you’d like to know more about building stronger financial foundations for your business, download our free guide, contact us here or call us on 01297 639457.
