Here we provide some quick fire tips on how to manage your small business finances to maximum effect.
1. Manage Cash Flow
Cash flow needs to be monitored on a regular basis. You should calculate what needs to be paid at the beginning of the month and then ensure you have sufficient customer payments to meet all your payments. You will now know fairly quickly if you have a shortfall and will then be in a position to discuss the situation with your suppliers if you have to delay a payment. A supplier who is advised that there is a delay in payment will be much more supportive if they are advised in advance rather than the last minute.
2. Find a good Account and/or Business Adviser and speak with them regularly
It would be worthwhile asking your account about what is an acceptable level of communication in a month for the fees they charge you, before you send them a deluge of questions every day.
Seeking out a business finance adviser, such as Hugh Craen, or a business mentor can also prove very fruitful. External advisers are not swayed by internal politics and can provide your a clear and balanced judgement on important decisions.
3. Build a good relationship with your suppliers and customers
These are just a few examples, each business is different, it's up to you to find out what a strong business relationship really means.
4. Keep your accounting records up to date
For example, you may find reducing spend on items such as travel, because you can manage more meeting online/telephone, saves a considerable sum of money and time. However, to do this well you need to improve your computers or phones. Making an investment can often pay off, but you need to know what the costs and savings you are to make a quantified judgement.
5. Avoid Bad Debts
You will find that your suppliers will set credit limits on your business so this is not something that will surprise or upset your customers. A sound credit policy will also ensure that your business will be more attractive to any invoice finance should you seek a funding facility.
6. (one extra!) Keep a cool head
Remember the stakeholders in your business, shareholders,funders, customers and suppliers will want you to succeed so will be happy to work with you to overcome your problems.
If you'd like any more advice or have thought above developing improved cash flow through solutions such as Invoice Finance, contact us to find out more.