Fashion Professional: Top tips for maintaining a healthy balance sheet

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Great news, you’ve secured the fashion line order, you’ve got customers booking you up for the next six months, and things are looking rather grand on building the business and brand front. But, we mustn’t get carried away. We can’t. Things change too fast, especially in the creative industry.

Our recent post on Famous Fashion Brands is a testament to how fast things can happen and circumstances change in an instant. No matter how many orders you have coming in, managing your finances is a full-time position.

In this post, we’re going to look at some of the ways creative businesses can keep a steady cash flow forecast in a turbulent market.

Tips for maintaining a healthy cash flow

  1. Keep it simple – it may sound obvious, but it’s important to keep an eye on your accounts. Knowing where every penny is going and exactly what is coming into your business helps you stay on top of things and stop things going awry.

Of course, we know you want to do the thing that excites you most, which in our industry is much more creative than accounting, but we can’t stress enough how important this is. Remember the “fail to plan and plan to fail” motto? Stick to it and keep it as your mantra.

  1. Don’t let late payment pull you down. If you’re worried about late payments, look to offer incentives for early payments. Or if you’re experiencing late payment problems with certain suppliers or customers, look to put strong terms and conditions in place to secure debts faster and consider charging late payment penalties where necessary.

It’s also important to do your research into who you’re working with and to take on board that the fashion industry is known for its unusually long cash-flow cycle. Moving from design to factory, contracting, production, logistics, and sales – all take financing, and you need to have the cash flow reserves in place to be able to manage this cycle.

Consider options such as factoring, or invoice discounting to help maintain your cash flow while you wait for payment.

  1. If you’re looking to grow your business, you need to consider your funding options.

For those within the fashion industry, one of the main streams of funding comes through investment. Investment into the brand, into your fashion line, while at the same time taking a share or a percentage return in the business.

It’s about finding the right investor for you and your business. Think about what skills they can offer and bring (other than just cash). What are you looking for and how can it help your business grow? Think long term.

  1. One of the worst mistakes we can make in business is burying our heads in the sand and ploughing on. Not asking for advice or help from our peers and/or professionals in the financial industry is not going to help you or your business, don’t struggle on in silence. Speaking to someone who has been in through what you’re experiencing or has knowledge of the options available to get you over a hurdle is essential to keeping you moving forward.


Maintaining a strong financial foothold in the industry, as well as looking to grow your business isn’t easy, but when we look at the famous fashion brands that are around today, we know it can be done.

Start thinking about getting invoices out on time, every time. Make sure you have good, if not the best, payment terms with your suppliers and that you also look at software and possibly even accountancy packages to help you manage your cash flow and provide that bird’s eye view you need.

Cash flow cycles aren’t easy, but they are manageable and can be positively maintained and grown if you have the right forward-thinking in place.

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