Managing Cashflow with AIB
At any, and every, stage of your founder journey financial planning and cashflow is King or Queen as it may be.
Being the boss of your own startup is hugely exciting and can pay huge dividends in terms of bringing your dreams to fruition, having real impact, being financially secure and just building something really great.
It also comes with a lot of responsibility, including managing your cashflow and paying your bills on time. Getting to grips with your company finances from the get-go can significantly help with the success of your business.
Getting Your Financial Ducks in a Row: Maeve Walsh, Finance & Leasing Representative at AIB shared some insights on the importance of cashflow at various stages of the year or phases in your business linked to its growth potential.
Many founders do not come from a financial background. Money is often a hard subject to tackle but you have to put in the hard yards in getting to grips with Profit and Loss, Cashflow, Debt Management, Assets and so on.
Cash flow is a fundamental financial concept that plays a crucial role in determining the financial health and sustainability of your business. It covers operational (daily transactions money in / money out), more substantial transactions (assets/equipment…) and debt or equity management.
It’s important to build an early doors relationship with whomever you bank with to ensure you have some options available to alleviate pressure points across the year or when you know you might need some extra flex. Cashflow has direct positive or negative effect on all areas of the company including:
1. Financial Stability ensuring a steady stream of money to cover your operational expenses and invest in growth.
2. Business Growth to allow for growth opportunities, expand your operations or to take advantage of favourable market conditions.
3. Debt Management to give you enough financial runway, prevent unmanageable debt or which may affect long-term viability.
4. Flexibility to flex and adapt especially in early stages, respond to market fluctuations or uncertainty.
5. Investor Confidence to demonstrate strong cash flow management.
PromptPay by AIB is one such cash flow solution as it offers a short-term finance product that allows business customers to borrow over a 6-11 month period to ease cash flow on larger annual bills, such as tax, pensions, commercial property rates, professional and auditing fees. This can free up company cash to use on other unexpected expenses. It’s simple to apply for, drawdown the funds and comes at a fixed interest rate.
AwakenClub member and AIB client, Eadaoin Carrick, CEO of Cantec, an integrated hardware and software technology-based provider in Waterford, explains the importance of cashflow based on her involvement in the 30 year old family run business.
Having good communication with your bank is key especially when things might be a bit more challenging than usual. “Anytime we see anything worrying on the horizon we go straight to our Relationship Manager. Cashflow was a major issue for many businesses during Covid because the business suddenly wasn’t there, but your fixed costs remained. Being able to talk to our Relationship Manager to make sure everything was still being paid and to avail of supports was vital. A great example of this is being able to spread annual payments such as corporation tax or business insurance over the course of the year in manageable monthly repayments”.
For further information see the following link Spread Large Payment using PromptPay Finance, Business Finance Solutions | AIB Business or contact your local branch.
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