If you are feeling like improving your business cashflow is an ongoing battle then you are not alone, cashflow is the number one problem for SME’s throughout the UK, this ranges from waiting on late payments to simply not selling enough of your products or services. Not having enough cash at the bank leave your business in a tricky position and cause way too many sleepless nights. In order to make sure you sleep a little more sound at night we have pulled together our 4 top tips that will give your cashflow a boost.
Make more Sales:
This may seem obvious but the first thing you should do is take a look at your sales figures…are they where they really need to be? Selling more of your products and services is not just a potential solution to the cash flow problem but also to nearly every other challenge your business faces. How much time are you spending on finding new customers and do you really have a strategy in place?
Reduce the risk of late payers:
One of the other main reason businesses find themselves with poor cashflow is waiting on late payments from their customers. There are several ways you can reduce the risk of this happening; firstly, consider the payment terms you are offering…are they too generous? This might seem like a difficult question to be able to answer. However, there are several ways in which you can check either a person or even a business’s credit rating which will then help inform what kind of payment terms you should offer them. Also, consider setting your regular customers up on a direct debit as this gives you much more control over when the payments are made to you.
Reduce your Overheads and Costs:
You could adopt the “every penny is a prisoner” approach where you look to reduce any needless costs that you may have. This could be something as simple as having more meetings in your office instead of at the local coffee shop. Or, it could be a full blown procurement analysis / cost saving exercise where you evaluate all your costs and search for cheaper options ie. website hosting, fuel bills, phone/broadband costs, stationery alternatives, yearly maintenance and support contracts.
Get a better view of your company’s finances:
Having a real-time view of your company’s finances using an online platform like Xero or Quickbooks is not just a great way to see what your business has been doing but also where it might be heading. This is also something that your accountant (Magpie Accountancy obvs!!) can, or at least should be able to help you with.
Now that you are armed with your newfound cashflow knowledge you can go off and start reducing those overheads and raising invoices for all those new clients. If you have any other issued you feel that you need help with them please do get in touch with us, at Magpie Accountancy, we are fully qualified members of the ACCA.