In Lean Times, Cash Flow Beats Profit


With another deadline for leaving the European Union weeks away, Welsh firms are asking if they have enough cash reserves to cover all eventualities, and even turn Brexit into an opportunity.

Every business knows profit on the balance sheet doesn’t always mean cash in the bank, and if orders slow down or delayed payments creep up, they need a plan to access credit or liquidise assets. So, in this market, will digital emerge the hero for companies with fewer options to release cashflow?

According to Cardiff University’s latest Digital Maturity Survey, firms from all sectors are seeing evidence that moving online is beneficial to their business. The report doesn’t explicitly reference cashflow, but many gains outlined in the research do help directly or indirectly to improve reserves. And many examples of this can be seen first-hand from companies that have taken advantage of the free digital training Superfast Business Wales (SFBW) provides.

Increasingly our ideas are driven by technology

Many have switched to affordable technology like VoIP phone systems to reduce costs. Some use online software to make sales more profitable with tighter delivery or stock control. And others rely on online accountancy packages to keep cash moving. Though it’s true not every business has equal needs. For instance, Wonder Stuff, a village shop in Treorchy relies less on digital than cleaning company Apollo Wales to minimise running costs and alleviate associated financial stress. Yet, both have benefited.

“We no longer spend two days a week chasing outstanding payments”

Chris Birch, Apollo Wales

Apollo employs a significant number of staff to clean domestic and well-known commercial properties such as Tesco and Barclays Bank, across Wales, England and Spain. So, adopting a full range of digital options made sense. Over 12 months, they increased revenue by 200%, reduced staff turnover and the subsequent costs of rehiring, improved cash flow, and reduced the time spent chasing outstanding payments by two days a week using Kashflow.

The strategy was to create an environment that looked after staff welfare and delivered great customer care. To that end, it introduced a phone app, Rotaz, for staff to check rotas as well as book holiday and shifts. And Smart in-Out, a GPS system, which alerts clients when a job has been completed and adds a layer of security for lone or nightshift workers. Things grew from there. And digital marketing campaigns now win clients, web chat helps convert them and a customer relationship management system, HubSpot encourages repeat business. Read the full story

“Takings grew by a third and stock management time was cut by 20%”

Alison Chapman, Wonder Stuff

On a smaller scale, Treorchy village shop Wonder Stuff saw takings leap by a third since installing an EPOS system that also integrates Amazon’s mobile app seller. “Initially we used a manual till, recorded our sales in a logbook and guessed what goods we needed, sometimes wrongly. Now we analyse sales trends and receive alerts to replenish stock, so we buy regularly but in smaller quantities. It’s reduced the time we spend on stock management by 20% and minimised the items we hold on site by around quarter. And with less stock lying around and more sales coming in our cashflow is in a much better state”. Read the full story

There are other ways businesses can think their way out of the Brexit box

But is cashflow the whole story or does time also money translate into money? Staff at construction firm EvaBuild spend two thirds of their time on the road, while office colleagues wait for them to relay the information required to finalise their audits and reports. The fix was more data storage and remote access to the new tendering system Vector, introducing the ability to share information using apps such as FormConnect, and Office 365 for shared editing of key documents. “We are 50% more productive and have forecasted 20% year on year growth because of better time management”. Read the full story

The easy way to chase invoices, pay bills and sort taxes

Not every business has such complex needs. Some just want an easy way to chase their invoices, pay their bills and sort out their taxes without the monthly headache, as Mark Williams, Choice Bookkeeping’s Director, knows. There are phone apps that allow business owners to take a photo of their receipts before they bin them, as well as record invoices and mileage in real time. And Mark has designed a free app that does all this and stores images to evidence tax claims for seven years to avoid penalties.  “You just manage your accounts as you go along; the app automatically logs the information and sends it to QuickBooks or your preferred accountancy software where I can easily access it. It’s that easy.” Read the full story

Gain confidence and adapt with help from SFBW

Any small business who wants help in navigating modern technology can get in touch with Superfast Business Wales to access free workshops, 1-2-1 advice and a wide range of guides, other success stories for inspiration and the recently published Software Essentials.