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Business Advisory

The fourth cause of poor cashflow – your debt and capital structure

Posted by: Ewen Fletcher on

Explore how assessing your debt and capital structure can lead to reduced interest charges and significant cashflow improvements for your business. Discover actionable strategies to consolidate debt, optimise capital injections, and manage personal expenses to alleviate cashflow pressure.

Debt Assessment

Begin by compiling a comprehensive list of existing debts, including bank loans, mortgages, finance company loans, hire purchases, and credit card debts. Evaluate key factors such as the amount owed, interest rates, repayment terms, and interest type (fixed or floating).

Consolidation Opportunities

Consider opportunities to consolidate debt with a single lender and extend repayment terms. This approach can help free up additional cash within the business, supporting growth and covering essential expenses.

debt and capital structure concept

Review Personal Drawings

Assess whether personal drawings from the business for personal expenses are straining cashflow. Explore strategies to enhance business profitability or adjust personal expenses to better align with business cashflow.

Personal Expenditure Analysis

Conduct a detailed analysis of annual personal expenditure to identify potential areas for cost-saving. Utilise tools like a personal budget template to streamline the process and gain insights into spending habits.

Cashflow Forecasting

Prepare an updated personal budget and cashflow forecast to gauge the impact of potential changes on business cashflow. Seek professional guidance to navigate the forecasting process and identify opportunities for improvement.

Expert Assistance

Consult with experienced professionals to analyse your debt and capital structure thoroughly. Develop a personalised action plan to optimise cashflow and profitability, taking into account the potential benefits of strategic changes.

Call to Action

Schedule a Cashflow & Profit Improvement Meeting with us to assess your debt and capital structure comprehensively. Through expert analysis and guidance, we can help identify opportunities to optimise cashflow and drive financial stability for your business.

Evaluating your debt and capital structure is essential for addressing cashflow challenges and ensuring the long-term success of your business. Contact us today to take proactive steps toward financial health and growth.

On Wednesday 20 March from 8-9am, Sharp Accounting will be running our Cashflow Freedom Seminar. This will be held at our offices here in Ballarat. Click here to find out more and register at no cost.

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