Resilience in the Face of Rising Costs: Cashflow Tips for SMEs

Updated: 30 May 2025

Aoife McGinley, Head of Client Services at Bibby Financial Services

With high inflation, increasing interest rates, energy bills, supply chain disruptions, the impending pension auto enrollment system, the new ‘living wage’ and extended sick leave policies, it's understandable that business leaders are actively seeking robust strategies to not just manage the business costs, but focus on growth.

At Bibby Financial Services, we deeply understand these pressures. Aoife McGinley, our Head of Client Services sees it everyday, businesses feeling the pressure to manage cashflow challenges, from delayed payments to rigid traditional funding options. She’s witnessed firsthand how these obstacles can stall growth and disrupt operations.

She breaks down simple strategies and offers advice on how businesses can navigate the current economic rollercoaster, balance the books and take advantage of growth opportunities.

Despite a high-cost environment, I believe that with the right strategies, businesses can not just survive, but actually grow. Here are some key financial planning actions that businesses should take now to set themselves up for 2025 and take advantage of any growth opportunities that present themselves over the course of the year.

1. Take control of your costs immediately

In a high-cost economy, careful cost management isn't just about saving money; it's about safeguarding your future profitability. While revenue generation remains crucial, a thorough review of your expenditures can reveal significant opportunities for efficiency and savings. It's important to clearly separate your core operational costs ("Business As Usual") from strategic investments. Your primary goal should be to reduce operational expenses while ensuring every investment delivers a tangible return.

Practical Cost Control Tips

  • Reduce Discretionary Spending: Immediately identify and postpone or eliminate non-essential expenses. Every saving directly improves your bottom line.
  • Negotiate Better Supplier Contracts: Actively review all third-party agreements. Understand exactly what you are paying for and proactively negotiate improved terms or competitive rates. This due diligence can lead to substantial savings for your business.
  • Diversify Revenue Streams: Avoid over-reliance on single sectors or major clients. Broadening your customer base and service offerings helps mitigate risks from market fluctuations and opens new avenues for expansion.
  • Streamline Business Processes: Identify and remove any bottlenecks or inefficiencies within your operations. Optimising workflows can result in significant time and cost savings.
  • Embrace Digital Tools & Technology: Explore how modern technology can automate repetitive tasks, enhance operational efficiency, and reduce manual labour costs without compromising excellent customer service.
  • Build a Robust Cash Reserve: Aim to establish a three-to-six-month cash reserve. This financial buffer is a crucial safeguard against unexpected expenses or periods of reduced income, ensuring your day-to-day operations remain stable.
This rigorous financial review will not only highlight potential savings but also inform crucial growth-related decisions, such as investing in new equipment, planning market expansion, or exploring new product lines.

2. Keep cashflow moving – no matter what size your company is

Effective cash flow management is critical for businesses of all sizes. Late payments and unexpected expenses can severely disrupt your plans. Maintaining healthy cash flow is essential for both stability and future investment.

Whether you are turning over €100,000 or millions, cashflow is vital. Late payments and unexpected expenses can throw your plans off course, so managing cash effectively is critical.

  • Set clear payment terms and offer incentives for early payments.
  • Spot potential cashflow gaps before they happen with forecasting tools.
  • A funding solution such as Invoice Finance can greatly support cashflow management as it bridges the gap between asking for and receiving payment. Unlocking cash from unpaid invoices releases working capital from what you have already earned, without taking on additional debt.

3. Prioritising Customer Retention: Your Most Valuable Growth Asset

While attracting new clients is always a focus, customer retention is consistently proven to be more cost-effective and a stronger driver of long-term business success. Your existing customer base represents a stable, valuable, and often overlooked revenue stream for your company.

To facilitate this, ensure your service matches the needs of your clients and reward your loyal customers. Keep in regular contact through follow-ups and engage in occasional special offers. In addition, aim to connect and build stronger relationships via social media and email marketing.

4. Don’t leave money on the table: Claim any tax relief incentives or funding grants

Many businesses miss out on valuable tax relief incentives and government funding options. These supports can significantly boost your financial position, particularly when making long-term investments.

Key Avenues to Explore:

  • Capital Allowances: Understand how these allow Irish businesses to claim tax relief on qualifying capital expenditure, such as plant and machinery, vehicles, computer software, and certain intangible assets. These provide significant cash flow benefits and reduce overall tax liability.

    • SEAI Accelerated Capital Allowances (ACA): If your business is investing in energy-efficient equipment in Ireland, the ACA program offers a 100% deduction of the cost against your corporation tax or income in the first year.
  • Research & Development (R&D) Tax Credit: Designed for Irish companies undertaking innovative projects in science or technology, this offers a valuable 25% tax credit on qualifying R&D expenditure.

  • Enterprise Ireland Supports:
    • Business Transformation Projects: Explore support for major transformation projects aimed at international competitiveness (up to 70% of eligible costs for projects over €100,000).
    • Expert Consultant Support: Access up to €5,000 worth of time with external consultants in areas like finance, human resources, operations, and marketing.
    • Digital Technologies Grant: Secure up to 80% grant funding (maximum €10,000) for introducing new digital technologies to boost efficiency and enhance customer experience.
  • Key Employee Engagement Programme (KEEP) (Revenue): This scheme can help your business attract and retain key employees by providing tax-advantaged share-based remuneration.
  • InterTradeIreland Programmes: For businesses considering cross-border trading, these programmes offer substantial support, including towards sales staff salaries and market research.
  • Strategic Banking Corporation of Ireland (SBCI): Explore low-cost credit options, including Invoice Finance, to improve SME cash flow and support overall business growth in Ireland.