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​Starting a business is to make money, right?

Posted 17/01/2020 by Patrick Leavy

The whole point of starting a business is to make money, right?

There may be other reasons that drive your desire to start a business such as freedom or personal goals, but these often don’t materialise without cash to back them.

To make money you must be profitable, but even then, with a healthy-looking monthly profit and loss statement, you can run into cash flow issues. Your profit and loss report reflects effort, and what you invoiced customers for that effort. What it doesn’t show is who actually paid those invoices.

The Wider Picture

Xero have released a report* showing stats on late payments to small businesses in the UK in 2019.

  • 48% of invoices issued are paid late
  • These are paid 14 days late on average
  • On any given day £23,360 is owed to the average UK small business

What does this mean for the business owner?

Time - Up to two weeks a year lost chasing late payments

Mental Health – 44% reported a negative effect on mental health (kept up at night worrying)

Choice - When they money is not in your bank you don’t have the choice of how to use it

Businesses owners who engage with cash management are more likely to succeed than those who leave it to their admin staff. We provide proactive advice and action through our cash management and Virtual Chief Financial Officer services. Using clever tech tools such as GoCardless, Chaser and Float will show you how to get the most value. So get in touch if you want to boost the amount of available cash to your business.

*Xero report:

Book tickets for our free cash flow business event in Norwich on 4th February 2020 here.

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