How can a Certified Accountant Help to Optimize Business Cash Flow
02

Nov 2020

Do you know that a usual mistake many businesses make? Many businesses address their cash flow challenges too late.

What is the danger of addressing late? Failing to react in a timely manner can usher to financial difficulties, and in worse case scenarios, can lead to insolvencies or liquidation.

If a business is incompetent to pay its staff or relevant bills on time, then the business is more likely to run into serious financial problems in the future. In order to save the business in such a situation, you need a certified accountant in Dubai.

A certified Accountant in Dubai can play a vital role in spotting the problems early in the cash flow statements and recommend ways to quickly charge capital. Hence, the accountants in Dubai help their clients to be ready for uncertainty and find methods to solve before the effect of a negative cash flow projection. First of all, let us understand what is cash flow.

What is Cash Flow?

Cash flow is the total amount of cash and cash equivalents that are transferred in and out of the businesses. At the most basic level, a company’s potential to create value for shareholders is decided by its ability to develop positive cash flows, or more specifically, increase long-term free cash flow.

The most basic objectives of financial reporting are evaluating the amounts, timing, and uncertainty of cash flows. Understanding the cash flow statements is significant for evaluating the liquidation of the company, flexibility, and entire financial performance of the company. Understanding the cash flow statements describes operating cash flow, investing cash flow, financing cash flow, and cash flow projection.

How can a Certified Accountant Cure your Cash Flow Problems?

Let us understand how a certified accountant in Dubai can quickly help you bridge your business's cash flow gap and what financing options you can look for.

1.Overdraft or Credit Card

Many businesses in the UAE have a mortgage set up for their business bank account or hold a business credit card. Both can assist them with recurring trends and short-term cash flow challenges.

The biggest merit of this option is that the outstanding balance can be repaid, interest-free, after one month. Businesses quickly extend their limits once they need huge sums or want to borrow money for a long time.

2.Invoice Finance

Invoice finance lenders promote 80-90% of what an invoice is worth so that businesses could ingress owed money faster. If your business regularly invoices other companies, this could be a very good source of short-term funding and can help reduce cash flow problems.

However, this method is only operational for businesses that depend on commercial invoices. If a business works basically with consumers, they’ll have to seek finance elsewhere.

3.Unsecured business loan

Most business loans are fortified against commercial assets, personal assets, or need a personal guarantee from a business owner. There are some lenders who provide fully unsecured short-term loans to profitable and established businesses, without the need for a personal guarantee.

Loan evaluation criteria are stricter, given that the lender accepts a considerably higher risk. Therefore, many businesses are delighted to receive a short-term loan without requiring to put an asset or their house on the line.

4.Spot the problems early

As we have mentioned earlier, detecting the cash flow problems in business early is vital to find the best solution. Once you know how much money is required, you can assist them in finding the funding that fits.

The role of the accountant is changing. The accountants in Dubai can become more flexible by staying up-to-date with current advancements and adapting to the changing landscape.  Increasingly active and knowledgeable accountants mean businesses can benefit a great deal from their accounting and financial services.

Ultimately, they will be in a good position than their competitors because their accounting and financial services are ahead of the curve with their knowledge of the business landscapes.

5.Cash is King

In any business, you must know that "cash is king." Cash flow is the driving force of all businesses. Therefore, it is essential that the business owners must anticipate what is going to happen to cash flow to ensure that the business has enough to survive. This is where the role of an accountant comes in.

In producing accounting and financial forecasts for your business, you are always going to stay up to date on your cash position. If you keep a close look at your cash position, you will have the opportunity to solve any issues.

If you are looking for the services of a certified accountant who can optimize your business cash flow, have a look at the services provided by JAXA Chartered Accountants. 

For more details, do contact us – we’d be delighted to help you.