FINANCE
By Dan Morgan, Managing Partner, Haines Watts Esher
PROTECTING YOUR BUSINESS FROM THE RISKS OF OVERTRADING With lockdown restrictions continuing to ease in accordance with the Government’s roadmap, businesses will be looking at re-opening and rebuilding their trading. However, it is important to make sure that this initial surge in business activity doesn’t result in overtrading. Overtrading is when the growth in your business becomes unsustainable because you no longer have the resources to fulfil the demand. In particular, pressure on working capital could be a real risk. During the course of the pandemic if you have used your cash reserves to survive you may need to build up trade slowly to balance the credit given to your customers versus credit received from suppliers.
❛❛ Every business will be showing the same levels of risk aversion as you so suppliers are likely to be much stricter on their payment terms ❜❜
28
www.platinummediagroup.co.uk
