In a period of uncertain demand, rising wage and energy bills, supply chain disruption and late payments, having a clearer view of how cash moves in and out may help businesses plan more effectively.
At a glance: improving working capital and cash flow resilience
- Key takeaway: Businesses can strengthen working capital by reviewing payment cycles, forecasting cash flow and segmenting cash by purpose.
- Key actions: Check customer and supplier terms, plan short-term liquidity and consider suitable deposits, trade finance or working capital support.
- Why it matters: Rising costs, late payments and supply chain disruption can put pressure on cash flow.
Why working capital resilience matters
Managing cashflow and working capital can be important for business resilience. With higher borrowing costs, uncertain demand, rising wage and energy bills, supply chain disruption and late payments, businesses may benefit from having a clear view of how cash moves in and out.
A considered working capital strategy may help businesses support day-to-day operations, identify potential risks earlier and plan with greater confidence.
How should you review cash flow and payment cycles?
It may be useful to start by reviewing your customers, suppliers and payment terms. Consider focusing on the customers that generate a significant share of your income and the suppliers that are most important to your operations.
Market pressure may affect how quickly customers pay and how suppliers trade. Contract terms that worked in the past may need to be revisited if cash flow patterns have changed.
A 13-week or 17-week cash flow forecast could provide a practical view of short-term liquidity. It may help businesses identify pressure points, underperforming product lines, delayed receipts or opportunities to improve how cash moves through the business.
How can cash segmentation support better decision-making?
Segmenting cash means separating money by purpose. This might include day-to-day cash for immediate bills and wages, core reserves for medium-term needs and longer-term funds for strategic plans.
This approach may help businesses understand what needs to remain accessible and what could potentially be allocated elsewhere. It may also make it easier to consider reserves against expected income, costs and future commitments.
How can surplus cash work harder?
Deposits can play a role in a wider working capital plan. Depending on the product, they may help businesses manage liquidity and support financial planning.
Once you have segmented your cash, you may identify funds that are not needed immediately. Depending on your access needs, savings options could help surplus cash work harder. The right approach will depend on your business model, cash requirements, eligibility, product terms and appetite for flexibility.
The best business savings account depends on your goals, how quickly you need access to your funds and how you prefer to save. Compare NatWest’s accounts to find the right fit for your business.
Business bank accounts are available to eligible customers who are over 18. Specific account and service eligibility criteria apply.
How can business manage supply chain and fraud risks?
New customers and suppliers may create opportunity, but they can also introduce risk. Before releasing funds or goods, businesses may wish to check trading relationships carefully and verify payment details using trusted channels.
Trade tools may support buyer and seller relationships, particularly when entering new markets or working with new partners. Supply chain finance programmes may also help with working capital where they are available, suitable and appropriate.
Managing currency exchange rate changes is a big part of financial planning. NatWest offers solutions to help you manage this risk, protecting your profits from unexpected movements.
We offer various trade finance products like letters of credit and guarantees. These can provide assurance that you’ll get paid, helping to reduce financial risks in international dealings.* UK Export Finance also provides guarantees and insurance to support UK exports.
*Security may be required. Product fees may apply. Over 18s only. Subject to status, business use only. Any property or asset used as security may be repossessed or forfeited if you do not keep up repayments on any debt secured on it. Our Trade Services Terms and Conditions are available here.
What should your next step be?
A flexible business model, reliable data and regular reviews may help businesses respond to a changing economy. Working capital may need to be reviewed as trading conditions, customer behaviour and supplier pressures evolve.
You may wish to speak to us or your financial adviser about options that could be suitable for your business, including cash flow forecasting, deposits, trade finance and wider working capital support. Eligibility, terms and conditions may apply.
