Fashion & Retail: Tips for maintaining a healthy cashflow

In this post, we look at some of the ways creative businesses can keep a steady cashflow forecast in a turbulent market.

Article published online at Fashion Rider, the fashion industry’s premium membership site. Beavis Morgan is the preferred finance partner to Fashion Rider.

The following tips are designed to help you maintain a healthy cash flow:

1. Keep it simple – it may sound obvious, but it’s important to keep an eye on your accounts. Knowing where every penny is going and exactly what is coming into your business helps you stay on top of things and stop things going awry.

Of course, we know you want to do the thing that excites you most, which in our industry is much more creative than accounting, but we can’t stress enough how important this is. Remember the “fail to plan and plan to fail” motto? Stick to it and keep it as your mantra.

2. Don’t let late payment pull you down. If you’re worried about late payments, look to offer incentives for early payments. Or if you’re experiencing late payment problems with certain suppliers or customers, look to put strong terms and conditions in place to secure debts faster and consider charging late payment penalties where necessary.

It’s also important to do your research into who you’re working with and to take on board that the fashion industry is known for its unusually long cashflow cycle. Moving from design to factory, contracting, production, logistics, and sales – all take financing, and you need to have the cashflow reserves in place to be able to manage this cycle.

Consider options such as factoring, or invoice discounting to help maintain your cashflow while you wait for payment.

3. If you’re looking to grow your business, you need to consider your funding options.

For those within the fashion industry, one of the main streams of funding comes through investment. Investment into the brand, into your fashion line, while at the same time taking a share or a percentage return in the business.

It’s about finding the right investor for you and your business. Think about what skills they can offer and bring (other than just cash). What are you looking for and how can it help your business grow? Think long term.

4. One of the worst mistakes we can make in business is burying our heads in the sand and ploughing on. Not asking for advice or help from our peers and/or professionals in the financial industry is not going to help you or your business, don’t struggle on in silence. Speaking to someone who has been in through what you’re experiencing or has knowledge of the options available to get you over a hurdle is essential to keeping you moving forward.


Maintaining a strong financial foothold in the industry, as well as looking to grow your business isn’t easy, but when we look at the famous fashion brands that are around today, we know it can be done.
Start thinking about getting invoices out on time, every time. Make sure you have good, if not the best, payment terms with your suppliers and that you also look at software and possibly even accountancy packages to help you manage your cashflow and provide that bird’s eye view you need.

Cashflow cycles aren’t easy, but they are manageable and can be positively maintained and grown if you have the right forward-thinking in place.

About Beavis Morgan

When it comes to cashflow, SMEs have a tight ship to run. It is therefore essential that business owners receive the specialist support and guidance they need to make effective decisions both now and for the future, as well as access to the right financial products suited to their specific business needs.

Our SME business experts at Beavis Morgan are available to structure your business with cashflow and profit forecasting to measure performance and maximise opportunities. We work to a pre-determined plan, to help you avoid any nasty surprises.

Through our partner businesses, BM Structured Finance and BM Advisory, we are also able to help with sourcing and restructuring debt finance for SME businesses, as well as assisting with resolving issues which can impact on business performance and success, and finding innovative solutions for businesses and individuals in distress.

If you would like to discuss ways of improving the free cashflow in your business, please contact Steve Govey or your usual Beavis Morgan Partner.

We are here to guide you through each stage of the business lifecycle, whilst navigating the challenges and advising on making the right decisions both now and for the future – for you, your family and your businesses.

Click here for more advice and tips for small and medium sized businesses throughout each lifestage – from startup, through growth, maturity and exit