Confident Cashflow

Improving a client’s cashflow in just one hour

Since 2011, Life Media UK has been creating punchy and effective marketing videos for businesses based countrywide and internationally, from its hubs in Bristol and Manchester.

The brief

Life Media UK director Sunjay Singh was looking for help with cashflow issues the business was experiencing on a monthly basis.

The business employs its own team, with little freelance support, so has a significant monthly salary commitment to meet.

However, money coming in wasn’t spread evenly, so there were cash gaps. Video production might take two or three months, after which invoices were submitted to clients, who were often demanding 90-day payment terms.

In the meantime, expenses like the cost of hiring equipment had to be covered upfront, further draining resources.

As the business grew, so did the problem of outstanding invoices, with clients taking advantage of Like Media UK’s long payment terms, and some being slow or late to pay.

The solution

Sunjay invested in one of our Cashflow Focus sessions. We talked through the issues Life Media UK was experiencing, and came up with a number of practical solutions that could be introduced immediately.

For example, we suggested they change the timing of invoice reminders, to bring cash more quickly into the business. We suggested steps such as incentivising early payment, or changing payment terms.

We talked about negotiating spreading payments for expenses, such as equipment hire, to make it more favourable to the business, and we also looked at timing of payments out, so they could be adjusted to dovetail with payments in.

We also focused on the credit terms being offered, or that clients were taking, and how these could be adjusted.

The outcome

Thanks to our Cashflow Focus session, Sunjay was able to implement immediately some of our recommendations and saw instant results, with average late payment time reducing from 70 days late to 40 – almost halved.

The team no longer release videos until they have received final payment, which is a great incentive to their clients to pay. For last minute commissions, they now insist on 100% payment up front.

Sunjay said running the business is now less stressful, as his cashflow worries have been eased.

“My business partner Will and I have zero finance background and didn’t know what we could do to ease the pain of all this.

“What was great about working with Nicki was she talked about real, actionable steps we could take. She wasn’t trying to teach me concepts, she was giving me real solutions.

“It has given us clearer guidelines and insights on process. It has put us in control, instead of the client. Because the cashflow in has improved, our relationship with suppliers is stronger, because we aren’t late paying them.

“It’s not hyperbole to say the transformation that Nicki catalysed happened by the end of the hour of our Cashflow Focus session. It was like she stepped into our business and became the CFO for 60 minutes.

“The moral of the story is, I did what Nicki suggested, that transformed our cashflow, and we are better off for it both financially and reputationally.”

How might a Cashflow Focus session help your business?

We can cover a lot – here are some of the typical areas we advise on:

• Mapping out basic Ts & Cs for a new business
• Talking through how to ask for credit and avoid traps
• Helping get in the right mindset to chase unpaid invoices

Are you interested in booking a Cashflow Focus session? Or would you like us to work with you longer term? If you’re suffering from late payments, why not outsource your credit control to us? To find out more, please get in touch.