The fourth cause of poor cashflow - Your debt or capital structure

Anna Stubbs • April 19, 2024

Often a reduction in interest charges as well as significant cashflow improvements can be achieved with a regular review of existing debt.

A good place to start is to list all bank loans, mortgages, finance company loans, hire purchases, credit card debts, and any other debts (don’t include amounts owed to suppliers in this list). Add columns to cover:

  • The amount of the debt owed
  • The interest rate being charged
  • Whether the interest is charged on a fixed or floating rate basis
  • Repayment terms (the number of years the debt is to be repaid over)


Perhaps your debt can be consolidated, financed by one lender and paid off over a longer term. This will help you retain more cash in the business which is vital for growth (or even just to cover expenses and your drawings).

Are the drawings you take from the business for personal expenses placing pressure on cashflow? If so, that might mean that we need to look at strategies to lift the profitability of the business. It might mean that your drawings are just too high for the business to support right now. The business may need an injection of capital to fund its growth.

Here’s an interesting exercise for you to do. List out your annual personal expenditure in detailed categories; everything from rent, childcare, groceries and eating out. You may need to prepare yourself for a shock. If you’re serious about this, we have a Personal Budget Template that you can use to make life easier.

Getting your debt and capital structure right makes a big difference to the cashflow in your business. This is a subject that we have a lot of experience in. The first step is to prepare an updated personal budget and a Cashflow Forecast, then measure the extra cash the business will have as a result of making some simple changes. We can help you calculate this extra cash at our Cashflow & Profit Improvement Meeting.

Doing a forecast for the first time seems scary, but once you’ve done it, you’ll realise that it’s one of the most essential business tools you’ll ever put in place. We can do the forecast with you. You’ll sleep better for it!

Making Tax Digital to be extended to more sole traders and landlords

By Anna Stubbs • April 9, 2025
Hiding in the HM Revenue & Customs (HMRC) announcements published on 26 March was a technical note entitled ‘Modernising the tax system through Making Tax Digital‘. This note announces that the income threshold for Making Tax Digital for Income Tax & Self Assessment (or MTD for ITSA) is to drop to £20,000 per annum for sole traders and landlords. If you fall into this category, this means moving your tax completely over to digital by April 2026. But don’t worry, let’s see what MTD for ITSA is all about.

Reducing the uncertainty: financial forecasting and planning

By Anna Stubbs • April 9, 2025
Uncertainty can be a major threat to your strategic financial planning. Being unsure of what lies around the corner makes it difficult to make those important financial decisions around operational budgets, investment and growth funding. But by using forecasting and scenario-planning, you make it easier to manage your finances and reduce some of the financial uncertainty.

What's new in Xero (Spring 2025)

By Anna Stubbs • April 9, 2025
Some great new enhancements have come to Xero in the first few months of the year, here's some important features that have been released: Enhancements to the new invoicing Keyboard shortcuts. Drag and drop attachments. Date Picker quick select. Exchange rate adjustments in the invoice. Tracking categories for invoices. Automated bill entry The ability to upload bills directly to Xero, create one or many bills by dragging and dropping multiple files. Xero creates draft bills with the key details, and the original document is attached. Other important features (region dependent) Bank feed updates (Australia adds Suncorp Bank, United States gains PNC Commercial). Simplified whole operations with improved sales orders (United States). Easier 1099 reporting and filing (United States). Streamlined tax workflow and compliance (United Kingdom). Easier reporting (United States Schedule C compliance report, New Zealand not-for-profit tier 3 & 4 PBE reports). For the full breakdown read Xero's update .