How to spring-clean your business finance

The first quarter of 2022 is coming to a close. UK business leaders are feeling optimistic and are preparing to welcome the first green shoots of growth in the second quarter. It’s the perfect time to get fit for business with a thorough spring clean of your finances. 

Is your cashflow looking ship-shape? Does your credit score need dusting off and a quick polish? And is your current funding strategy putting the right sparkle on your growth plans?

We look at the main business finance areas to focus on. And give you the top tips and insights you need for a successful and productive spring clean. 

1. Are you in control of your numbers?

If you’re going to start any kind of business finance spring clean, it’s important to have the right numbers in front of you. It’s easier to gauge your financial position, both before and after the cleanup, if you have solid, reliable data to work with. 

For example:

• If you’re already using cloud accounting software, make the most of the built in reporting

• Look at your balance sheet to get a handle on what you own, and what you owe

• Run a profit and loss report (P&L) to see how your income and expenditure is looking

• Run a cashflow statement to check on your overall cash position

And if you don’t feel confident about interpreting this data on your own, book some time in with your accountant to go through the numbers together. In fact, getting your accountant on board is something to consider for any of the tips to follow.

2. Are you in a good cashflow position?

Cash is the life force of your business. It funds your operations, pays your bills and allows you to invest in growth. But what’s your current cash balance looking like? Cashflow has been unpredictable in recent times, so it’s sensible to keep a close eye on your position.

Ask yourself:

• Are there any potential cashflow gaps coming up in the second quarter of this year?

• Have you run any projections to look at income and expenditure over the next three months?

• Do you have enough cash to cover short-term liabilities like an upcoming VAT bill? 

• If not, what short-term funding options could you use to bridge the gap?

3. How's your credit score looking?

Your credit score is a crucial measure of the fitness of your business finance. A good credit score helps you win more contracts and access better trade credit. And being in an excellent credit position also makes it easier to access the funding you may need.

Think about:

• What your current credit score is and how it measures up

• Which factors are having a positive impact on your score, and how to maintain them 

• What’s having a negative impact on your score, and what can you do to change that

• Talking to a credit improvement specialist to help maximise your score

4. What funding are you using?

To achieve your goals and objectives for the second quarter, it’s vital to have the right funding behind you. You may have taken out finance already, but is this funding still working for you? Ultimately, funding should be enabling you to bankroll the green shoots of growth, not acting as a drain on your cashflow and admin time. 

Maybe it’s time to:

• Review your current funding strategy and see if it needs a refresh

• Think about alternative finance options that could be more cost-effective

• Replace an expensive overdraft with a flexible invoice finance facility

• Get a better rate on your current business loan

5. Could consolidating your debt be the way to go?

Having to pay back several different loans or finance facilities gets complicated. There’s more admin to do, more payments to schedule and it’s difficult to track your overall debt position. Having multiple lines of debt from several lenders can also have a negative impact on your credit score. So, could consolidating these multiple debts into one be the answer?

You could:

• Make life easier by moving your existing facilities into one single funding line

• Improve your credit score at a stroke by reducing your lines of finance

• Create one easy-to-manage funding line and reduce your business finance worries

Capitalise for Business: putting the sparkle back in your business finance

Everyone loves the fresh, clean feel of a newly spring-cleaned home. And getting your business finance equally fresh and sparkling doesn’t have to be a chore. 

With Capitalise for Business, you have a one-stop shop for managing business finance. Everything you need to spring-clean your finances is available at the click of a button. And with a holistic view of the numbers, you’re ready to make 2022 a year of growth.

1. Access your credit profile – get free access to insights you’d usually have to pay for, including the credit information lenders have about your business. See how likely it is you’d be approved for funding and how much you could borrow.

2. Improve your credit score – track your credit score and see all the factors having a positive or negative impact. Get alerts when anything changes and tailored support to improve your score.

3. Find funding that’s a better fit – get matched with the right funding from the best source from a panel of over carefully selected 100 lenders. Apply to four lenders with one simple form and get help weighing up your options.

If you’re ready to hit the second quarter running, signing up to Capitalise for Business is the right move to make. All your finance insights in one place so you can tweak, tidy and polish up your business finance for the year ahead.