Now, more than ever, CASH is King.

Now, more than ever, CASH is King.

I’m a small business owner as well as an accountant. So I’ve seen the inside of many an SME. Here’s the single most important thing I’ve learned: As a leader of a business, especially a small business, your main role, almost your only role, is to ensure the positive cash flow of the business.

Now, more than ever, it is important to amass cash in your business. The businesses that will come out of lockdown and survive are the businesses that have built resilience into their model. A key part of being resilient is retaining a positive cash flow. 

Remember that your clients and customers and supplier are in the same boat and will probably have their own eye on their own cash flow so you’ll likely encounter resistance in a lot of areas, but keep applying the principles and you’ll be fine.

You must retain positive cash flow. Everything else is incidental: Keep the staff happy and motivated? Try motivating your team after the end of the month when the payroll is due and the bank account is empty. You’ll motivate them right out of the door.

Everything flows from cash flow. And as a business leader, whatever you do in your business has to be done with one eye on the bank. From concept to cash.

Even when you aren’t focussed on it, the job in hand is predicated on getting money in the bank. The whole process is a bit like the “There Was An Old Lady…” song we all learned at school. Except for businesses its more like “We created a website, to build up an interest, to create a buzz, to generate clients, to get them to buy, to send them an invoice, to get them to pay”. So, now we’ve established how important the free flowing of funds IN to the business, and the retention of those same funds, here’s our top ten tips (in no particular order) for managing cash flow. There’s really no point in getting everything else right if you just go and cock up the cash flow.

Tip 1:  Make it easy for customers to pay

Offer as many payment methods as possible: cash, cheque, bank transfer, credit cards. Oftentimes, you don’t even need to set up a merchant services account. Apps such as Stripe (stripe.com) and  iZettle (izettle.com) can have you accepting card payments online in a matter of minutes. And there’s obviously PayPal as well.

Tip 2: Accelerate invoicing

The quicker you can get an invoice to Accounts Payable of the customer, the better. Many online accounting systems like Xero allow you to generate invoices on the fly and email them by PDF. The quicker the invoice reaches the client, the quicker you’ll get paid.

Tip 3: Invoice accurately

If there’s one thing that’s certain, if you make a mistake on an invoice, it will not be paid. Remember that your customer is also more than likely working within serious cash flow constraints and will be look for reasons to not to pay until they absolutely have to. If you make a mistake on your invoice you can guarantee that this will give them an excuse not to pay. Don’t give them that excuse: make sure your invoices are correct.

Tip 4: Offer early settlement discounts

If you have the margins, and if you can afford it, offer discounts for early settlement. But you need to make it worthwhile. 10% is about the minimum that’s likely to make any odds.

Tip 5: Take up credit references

While not exactly foolproof (see Northern Rock, RBS etc) credit checking can help avoid bad debts. There’s no point in adding to this month’s bottom line with a sales invoice that’s going to come straight off next month’s. Experian and Equifax are a good start but also look at Creditsafe. You can also DIY by asking potential customers to provide references from other suppliers and their banks.

Tip 6: Ask for partial (or total) up front payment

There’s no shame in asking for upfront payment. If you’re embarrassed to ask, then you need to reconsider your career. Remember, big business were once small, established businesses were once start-ups. They all appreciate the pain of early stage cash flow and might be quite happy to help you out a little. But be prepared for a little quid-pro-quo. Upfront payment might merit a discount or an improved delivery schedule.

One of our salon owning clients has maintained a positive cash flow during the lockdown by putting the after-lockdown appointment book online and asking her customers to pay a deposit of around 20% to secure a spot. The client did this after reading my article Get Ready For (Re)Opening Day and in the first week of using the system, collected over £2,000 in deposits. Note: If you’re going to do this, remember that this income is not Revenue, it’s a liability – a promise to provide services in the future so make sure you book this to the balance sheet rather than the profit and loss account.

Tip 7:  Minimise fixed cost expenses

So far we’ve focussed on getting cash IN. But, nothing drains cash flow like fixed costs when there’s nowt coming in. Start ups should avoid costly rents and staff costs until there is a level guaranteed income. Need a place to work? hot desk. Need a meeting space? try hotel lobbies – it’s free and surprisingly professional. Use a virtual PA or call answering service like yourreceptiondesk.co.uk or virtualpa.co.uk until you can afford a real person to answer your ‘phone and make you coffee.

One of your largest fixed costs is likely to be Salaries. or Wages. You might have some or all of your team on furlough at the moment, but when the JRS well runs dry you might be forced to lay off some staff. This could well be the difference between surviving and business failure. If you are going to make redundancies, cut once and cut deep: it’s better to make the redundancies than have the threat hanging over your existing team members: a jittery workforce, in fear of their jobs, are not effective in the fight for business survival.

Reducing expenses also applies to the business owner personally as well as the business itself: if you can reduce your spending it will (a) reduce the amount of cash you need to flow from the business to your personal account, and (b) foster a “we’re all in it together” culture within the team. See the bonus tip below to see why this is so important.

Tip 8:  Only pay bills when you have to

I’m not suggesting you take the mickey out of suppliers but if you’ve negotiated terms, use them. If you’re given thirty days, pay on the thirtieth day. But not a day later. When you have a surplus of cash it may be an idea to pay early as well. This will normally give you some goodwill with your customers and might allow you a little flexibility when the time comes when there is a bill due and there’s no cash available for it.

During the current crisis, many landlords and suppliers are being extremely lenient with their tenants and customers. You should try to take advantage of this by arranging rent holidays, payment deferrals or extended terms. Remember that the businesses you work with are also worried about their survival and great deals are to be had. You can leverage but also remember that these businesses are in the same boar as you. So, be fair.

Tip 9: Set up pay monthly / subscription arrangements

If the service you provide is seasonal and therefore likely to cause your cash flow to experience significant peaks and troughs, try to even these out by offering your customers the ability to spread their payments monthly. This will probably be as attractive to them as it is to you.

Tip 10: Make sure you monitor cash flow

I’ve saved the most important until last: Get yourself a good accounting system that will allow you to monitor and control your cash flow. The old adage “what you can measure you can manage” has never been truer than when it comes to cash flow. A good system will allow you to chase and collect overdue payments, schedule payments of your own bills and to predict your projected cash flow and assess what impact certain events – ie, the non- or late-payment of a customer invoice will have. When you have this information to hand, you take appropriate action.

Bonus Tip: Get everyone on the same page

Be open with your team. Cultivate an attitude of “we’re going to weather this downturn together.” Go ahead and show them the books (or at least an overview) so they can see that ugly chart of dwindling (or heaven forbid, negative) cashflow. Don’t be afraid to say “we all need to be 10% more efficient and 10% more productive (ie., make 10% more while spending 10% less), or else none of us will have a job in 6 months.” Just including them in the problem solving process is often enough to motivate them to give that extra effort during tough times.

So that’s it. Take these tips into your business, apply them appropriately and you can guarantee your cash flow will be as good as it can possibly be.

Bounce Back Loan Scheme – More Government Support for business affected by COVID-19

Bounce Back Loan Scheme – More Government Support for business affected by COVID-19

In a welcome boost, small businesses owners can get from £2,000 to £50,000 “within days” from the Government’s brand new Bounce Back Loans scheme.

On 27 April 2020, Chancellor Rishi Sunak announced the new scheme, adding to the existing support for small businesses affected by coronavirus.

The Government is giving accredited lenders a 100% guarantee for the loans, and aiming to deliver loans through this scheme as quickly as possible.

What’s available?

You can borrow between £2,000 and £50,000, with a cap of 25% of your annual turnover.

The Chancellor stated you can get the cash “within days” but the scheme won’t open until Monday 4 May 2020.

Are you eligible?

You can apply for a loan if your business:

  • is based in the UK
  • has been negatively affected by coronavirus
  • was not an ‘undertaking in difficulty’ on 31 December 2019

PSC contractors will be eligible, as will most one-man limited companies. We know you’ve been left behind by the Government’s COVID-19 support measures so far, and this is your opportunity to access some much needed funds to ensure your business survival beyond the lockdown.

Are the loans interest-free?

No, but for the first 12 months, you won’t pay any interest and you won’t have to make any repayments.

You won’t pay an arrangement fee or early repayment charges – the Government will cover any fees as well as your interest for the first 12 months.

The Government is negotiating with lenders to make sure that for the rest of the term of the loans, borrowers pay a low standardised rate of interest.

How do you apply for a Bounce Back Loan?

The scheme will open for applications on Monday 4 May 2020. To apply, you’ll fill in a short online form.

Where can you get a Bounce Back Loan?

The scheme will be available through a network of accredited lenders and, as with CBILS, we are recommending the first port of call should perhaps be your existing business bank.

What can you use the loan for?

As far as we can see, so far there is no restriction on the use of the loan, and we see it as being sensible to use this as a contingency fund. Remember that there are no charges, interest or repayments required in the first year. 

If your business is in financial difficulties at the moment, then having access to the funds may be the lifeline you need until the crisis is over and your business is back earning.

Alternatively, if your business is not yet feeling the effects of lockdown, is not yet in financial distress, but it could be in the next few months, then having up to 25% of your turnover sitting in the bank could provide you with the buffer you need to keep going. If you don’t need it, don’t use it, and pay it back before the interest charging period starts.

How can Acumenica help?

Until more details are released, we don’t really know how much of the process we can help with. We do know that we calculate how much you’ll be eligible for and how much you might need (your cash runway) which is an essential part of any application. We’re told that the application process should be simple but we have our doubts about that.so we’ll beagle to help in the process too.

Join the conversation

How is the Coronavirus affecting your business? We ‘d love to hear from you. Please join our Facebook group to share your experiences, and get some help from your peers and our experts.


If you’d like to be kept informed about the Bounce Bank loans and how Acumenica can help you, please email info@acumenica.co.uk with the subject line: Bounce Back Business Loans and we’ll get back to you.

We’ll help you through this

Get ready for (re)opening day

Get ready for (re)opening day

These are worrying times for all businesses and salons are feeling it as bad, if not worse, than anyone else. With salons being forced to close their doors for a good few weeks yet, there is zero income coming in. Time to start thinking creatively.

Generate cash before lockdown is lifted

You can generate cash on every booking made, not just appointments you’ve completed, by using online deposits. Businesses that take deposits or require prepayment for their services when they reopen are going to be in a much better position to survive the post-COVID restrictions than the businesses that aren’t. 

Leverage that client relationship

Hairdressers have a special relationship with their clients and I believe that this can be capitalised on. That sounds a bit mercenary, I know, but I don;t mean it to. What I mean is that your clients will want to help you, and you should give them that opportunity. If clients realise that paying a deposit a couple of weeks or even a month in advance will help ensure your business survival, I feel sure that thy will happily do so.

Have you seen the state of some people’s hair?

Demand for your services will be through the roof once lockdown is over, so don’t worry about people paying in advance. If you can give them the competitive edge by offering priority booking for those paying a deposit or better, full payment, then you’ll be filling up those columns in no time.  The first thing most people will be doing is booking appointments for their much needed services, and they’ll be happy to pay a deposit to secure their booking. 

Bearing in mind that there are certainly going to be social distancing restrictions in place in your salon after lockdown, not having to wait around to pay after the appointment will definitely be a good idea. This would potentially allow you to take full payment in advance. And nobody wants to handle cash that’s been handed around goodness knows how many people, anyway.

Navigating client roadblocks

During my research for this article, two concerns kept popping up, and both are very valid: The first is “What if the salon goes bust? What will happen to the money I paid you?” This is a big concern, and remember that your clients might not exactly be rolling in the green at the moment either so will be naturally cautious. You need to get out in front of this and assure the clients that (a) your business is financially stable and that the support that the government has given you has ensured that you’ll be able to weather the storm. And of course, as payment is being made online by credit card, the payment is completely protected under section 75 of the Consumer Credit Act.

The other concern is “How can we book an appointment if we don’t know when lockdown will be eased?” It’s true that we don’t know exactly when lockdown restrictions applicable to salons will be lifted but we can make a decent guess. My feeling is that it’ll be either 18th or 25th May or maybe 1st June. If you’re out by a week then you just need to move the calendar up or down a week. And obviously assure your clients that if the appointment isn’t able to take place for X months, then a full refund will be given. 

Sweeten the deal

If there’s still resistance, you can always use the tried and tested discount or something for nothing routes. Maybe offer a 20% discount if payment in full is made in advance or give a free product up to a certain value with every online booking.

I appreciate that this goes against my normal recommendation of having faith in the value of your service and therefore do not offer discounts. But we are in a New Normal right now and all bets are off. This is about survival, not profit. And to survive, you might just need cash now rather than profit later.

Great plan. How do we do it?

For this to work you need two things: an online booking system and online payment capabilities. There are loads of online booking systems available but the salon specific one we like is www.gettimely.com which is available from £15 per month, per user. You can load up your appointment types, stylists, time estimates etc, and most importantly, cost. And obviously, you want to enable client log-in so that they can book their appointment without you needing to get involved.

Once you have this in place, you can then link it to your existing payment gateway or, if you don’t have one, set up a new online system. Again, there are loads of options on the market, but we like Stripe as a pretty solid all-rounder.

Communicating to your clients

Once you’ve got everything in place, you need to get the word out. You should have email addresses or mobile numbers for all of your clients, so a well worded message can let clients know when your business will reopen and include your online booking link so clients can book ahead for when you’re back up and running.

A well-timed social media campaign is also extremely important. Now, more than ever, people are using Instagram and Facebook to get their information. A strong social media presence is essential for any forward thinking salon. Encourage your clients to share your pages as well so that as many people can see what your plans are.

completed, by using online deposits. Businesses that take deposits or require prepayment for their services when they reopen are going to be in a much better position to survive the post-COVID restrictions than the businesses that aren’t. 

Worried that clients won’t book and pay in advance? Demand for your services will be through the roof once lockdown is over! The first thing most people will be doing is booking appointments for their much needed services, and they’ll be happy to pay a deposit to secure their booking. In fact, clients love the experience, because at the end of their appointment they can leave without having to wait around to pay – it’s like Uber for your salon!

With high demand and smart communication of policies to reassure clients that their deposits can be shifted to a new booking and even refunded if the appointment can’t go ahead within X months, your calendar and your bank account will be full. 

The Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme

If your business is struggling financially, you may be able to access bank funding through the CBILS scheme. The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

The scheme is a part of a wider package of government support for UK businesses and employees but remember, the finance available under the CBILS scheme is provided on a commercial basis by banks and other lenders, on normal commercial lending terms. These are loans (or overdrafts), not grants, and there will be interest and fees charged, and the loans will need to be repaid.

CBILS has been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the coronavirus crisis can access the funding they need.

Importantly, access to the scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. Insufficient security is no longer a condition to access the scheme.

This significantly increases the number of businesses eligible for the scheme. The expanded scheme will be operational with lenders from Monday 6 April 2020.

How it works

British Business Bank operates CBILS via its accredited lenders. There are over 40 of these lenders currently working to provide finance. They include:

  • high-street banks
  • challenger banks
  • asset-based lenders
  • smaller specialist local lenders

A lender can provide up to £5 million in the form of:

  • term loans
  • overdrafts
  • invoice finance
  • asset finance

CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending.

The borrower remains fully liable for the debt.

Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied;

a Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility

How to apply

Find a lender 

The first port of call should probably be your current business banker as they will know your business better and are likely to make a decision quicker than a cod contact.

You should approach the lender yourself, ideally via the lender’s website.

Notes: There is high demand for CBILS facilities. Phone lines are likely to be busy and branches may not be able to handle enquiries in person.

Not every accredited lender can provide every type of finance available under CBILS, and the amount of finance offered varies between lenders. Please see the lenders’ websites for more information on the amounts they are able to offer.

The lender makes a decision

The lender has the authority to decide whether to offer you finance.

Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

  • they exclude the Principal Private Residence (PPR), and
  • recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied

 If the lender turns your application down

If one lender turns you down, you can still approach other lenders within the scheme.

Access to the scheme has now been opened up to smaller businesses facing cashflow difficulties who previously would not have been eligible for CBILS because they met the requirements for a standard commercial facility.

You may therefore consider re-contacting your lender if you have previously been unsuccessful in securing funding.

Who is eligible?

Your business must:

  • Be UK-based in its business activity
  • Have an annual turnover of no more than £45 million
  • Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
  • Self-certify that it has been adversely impacted by the coronavirus (COVID-19).

Lenders will need further information to confirm eligibility. All lending decisions remain fully delegated to the 40+ accredited lenders.

Businesses from any sector can apply, except the following:

  • Banks, insurers and reinsurers (but not insurance brokers)
  • Public-sector bodies
  • Further-education establishments, if they are grant-funded
  • State-funded primary and secondary schools

What lenders will need from you

When you apply for a business loan, most lenders will ask you for the following:

Details of the loan

  • The amount you would like to borrow
  • What the money is for — the lender will check that it’s a suitable business purpose and the right type of finance for your needs
  • The period over which you will make the repayments — the lender will assess whether the loan is affordable for you

Supporting documents

You will need to provide certain evidence to show that you can afford to repay the loan. This is likely to include:

  • Management accounts
  • Cash flow forecast
  • Business plan
  • Historic accounts
  • Details of assets

The above requirements will vary from lender to lender. If you do not have everything listed here, a CBILS loan could still be an option to provide finance to support your business.

Note: For many customers approaching their existing lenders for a smaller facility, the process may be automated and therefore may not require the same level of documentation.


How can Acumenica Group help?

Acumenica are committed to helping their clients and the wider business community navigate their way through these difficult and unprecedented times. If you need help with your CBILS application, pease email alan@acumenica.co.uk or call us on 03330 166559. We ask that you remember that we expect to be extremely busy with this, so priority will be given to businesses who have been worse affected by the outbreak such as businesses operating in the hospitality, tourism and leisure industries. 

Cash is King? – you’d better believe it!

Cash is King? – you’d better believe it!

I’m a small business owner and an accountant. So I’ve seen the inside of many an SME. Here’s the single most important thing I’ve learned: As a leader of a business, especially a small business, your main role, almost your only role, is to ensure the positive cash flow of the business.

Everything else is incidental: Keep the staff happy and motivated? Try motivating your team after the end of the month when the payroll is due and the bank account is empty. You’ll motivate them right out of the door.

Everything flows from cash flow. And as a business leader, whatever you do in your business has to be done with one eye on the bank.

From concept to cash

Even when you aren’t focussed on it, the job in hand is predicated on getting money in the bank. The whole process is a bit like the “There Was An Old Lady…” song we all learned at school. Except for businesses its more like “We created a website, to build up an interest, to create a buzz, to generate clients, to get them to buy, to send them an invoice, to get them to pay”. So, now we’ve established how important the free flowing of funds IN to the business, and the retention of those same funds, here’s our top ten tips (in no particular order) for managing cash flow. There’s really no point in getting everything else right if you just go and cock up the cash flow.

Tip 1 Make it easy for customers to pay

Offer as many payment methods as possible: cash, cheque, bank transfer, direct debit, credit cards. Oftentimes, you don’t even need to set up a merchant services account. Apps such as Square (squareup.com) and  iZettle (izettle.com) can have you accepting card payments online in matter of minutes. And GoCardless (gocardless.com) allows you to accept Direct Debits. And there’s obviously PayPal as well.

Tip 2 Accelerate invoicing

The quicker you can get an invoice to Accounts Payable of the customer, the better. Many online accounting systems like Xero or Freeagent allow you to generate invoices on the fly and email them by PDF. The quicker the invoice reaches the client, the quicker you’ll get paid. Remember to add a link to your payment services in Tip 1.

Tip 3 Invoice accurately

If there’s one thing that’s certain, if you make a mistake on an invoice, it will not be paid. Remember that your customer is also more than likely working within serious cash flow constraints and will be look for reasons to not to pay until they absolutely have to. If you make a mistake on your invoice you can guarantee that this will give them an excuse not to pay. Don’t give them that excuse: make sure your invoices are correct.

Tip 4 Offer early settlement discounts

If you have the margins, and if you can afford it, offer discounts for early settlement. But you need to make it worthwhile. 10% is about the minimum that’s likely to make any odds.

Tip 5 Take up credit references

While not exactly foolproof (see Northern Rock, RBS etc) credit checking can help avoid bad debts. There’s no point in adding to this month’s bottom line with a sales invoice that’s going to come straight off next month’s. Experian and Equifax are a good start but also look at Creditsafe. You can also DIY by asking potential customers to provide references from other suppliers and their banks.

Tip 6 Ask for partial (or total) up front payment

There’s no shame in asking for upfront payment. If you’re embarrassed to ask, then you need to reconsider your career. Remember, big business were once small, established businesses were once start-ups. They all appreciate the pain of early stage cash flow and might be quite happy to help you out a little. But be prepared for a little quid-pro-quo. Upfront payment might merit a discount or an improved delivery schedule.

Tip 7 Minimise fixed cost expenses

So far we’ve focussed on getting cash IN. But, nothing drains cash flow like fixed costs when there’s nowt coming in. Start ups should avoid costly rents and staff costs until there is a level guaranteed income. Need a place to work? hot desk. Need a meeting space? try hotel lobbies – it’s free and surprisingly professional. Use a virtual PA or call answering service like yourreceptiondesk.co.uk or virtualpa.co.uk until you can afford a real person to answer your ‘phone and make you coffee.

Tip 8 Only pay bills when you have to

I’m not suggesting you take the mickey out of suppliers but if you’ve negotiated terms, use them. If you’re given thirty days, pay on the thirtieth day. But not a day later. When you have a surplus of cash it may be an idea to pay early as well. This will normally give you some goodwill with your customers and might allow you a little flexibility when the time comes when there is a bill due and there’s no cash available for it.

Tip 9 Set up pay monthly / subscription arrangements

If the service you provide is seasonal and therefore likely to cause your cash flow to experience significant peaks and troughs, try to even these out by offering your customers the ability to spread their payments monthly. This will probably be as attractive to them as it is to you.

Tip 10 Make sure you monitor cash flow

I’ve saved the most important until last: Get yourself a good accounting system that will allow you to monitor and control your cash flow. The old adage “what you can measure you can manage” has never been truer than when it comes to cash flow. A good system will allow you to chase and collect overdue payments, schedule payments of your own bills and to predict your projected cash flow and assess what impact certain events – ie, the non- or late-payment of a customer invoice will have. When you have this information to hand, you take appropriate action.

So that’s it. Take these tips into your business, apply them appropriately and you can guarantee your cash flow will be as good as it can possibly be.