Last month, the Forum of Private Business published research that stated that business costs last year increased at a rate of ‘3.5% ahead of inflation’.  According to the research, 94% of businesses reported an overall increase in the cost of running their business, with 87% of those surveyed saying rising energy costs were their biggest problem, with higher transport costs, marketing costs and raw materials/stock costs also posing problems for businesses.

This part of the year is full of renewed hope and expectations, so we want to ensure that businesses are able to cope with the rising costs by successfully managing their cashflow. We’ve put together our top five tips for you to follow so that you don’t feel the pinch:

Be vigilant with your budget – Regularly monitor and revise your budget so that you’re able to recognise any potential cash shortages.

Payments – Invoice customers promptly and chase any outstanding payments quickly. Also if you have customers who continually pay late, consider imposing charges.

Stock control – Yes, you need to have stock available, but be realistic. If you tie up all of your cash in stock, it may leave you short in other areas.

Know your limits – Be aware of the amount of orders you can afford to complete and stick to that, even if it means turning down business. If you overstretch yourself, your cashflow will suffer and so could your reputation as it may lead to letting customers down.

Have a backup plan – Think of this like a ‘just in case’. If you’re struggling and you can foresee that you will need financial help, arrange finance before you need it so that if and when the times comes, you have support ready to step in.