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Our top 10 tips to improve financial management within your business

Date October 11th 2016 by in Category Finance

1. Make sure that you have a realistic business plan 
A well thought out business plan will establish your current business status and demonstrate where you want to take your business over the next few years. It should include a detailed budget with information on how you will finance your business and its activities, what money you will need and where funding will come from. 

2. Monitor your finances
It is important that you stay on top of cash flow. We recommend that you monitor P&L on a deaily basis, making sure that you know exactly how much money you have in the bank. You should also review your position against the targets set in your business plan on a regular basis.

3. Consider all your funding options
There are a number of different funding options available, all with their individual benefits and risks. If you need to borrow money for whatever reason, your first port of call should be to check whether or not there are any grants available for your particular project or industry sector. There may also be tax reliefs available. When agreeing to any additional funding make sure you always read the small print and get advice if you are not sure.

4. Get the right one
It is essential that you choose the right type of finance for your business – each type of finance is designed to meet different needs. Smaller businesses usually rely more on business overdrafts and personal funding but this might not be the best kind of funding for your company.

5. Ensure customers pay you on time
Late payment of invoices is one of the biggest reasons that businesses fail. There are steps that you can take to reduce the risk of late or non-payment, E.g. making your credit terms and conditions obvious from the outset. If, however, you continue to experience issues with late payments, we can help to advise you on invoice financing. See here for more information.

6. Understand your sales cycles
Even profitable businesses can face difficulties if there isn’t enough money in the bank to cover day-to-day essentials and the cost of running a business. It is important to track trends in your sales cycles and be aware of any peaks and troughs that could impact cash flow.

7. Credit check your clients
Credit check all customers and suppliers before working with them. This is particularly important when the economy is in a poor state.

8. Meet tax deadlines
It is important to stay on top of your tax deadlines as failing to do so could incur fines and interest. These are unnecessary costs that can be avoided with some forward-planning. Keeping accurate records saves your business time and money and you can be confident that you’re only paying the tax you owe.

9. Become more efficient and control overheads
Is your business operating at its most efficient? Cutting the costs of your essential spend such as Energy, Telecoms and Business Supplies is one of the quickest and easiest ways to save money and increase profits. Energy is a particular area where you can change behaviour within your business and increase efficiencies. In particular we recommend you look at costs of heating, lighting, running office equipment or heavy machinery.

10. Have a hands on approach to your business finances
As a business owner or manager we understand that it is sometimes difficult to keep on top of all of the above as well as manage your business' essential spend. Our experienced consultants combined with our extensive supplier panel are available to help manage your procurement expenditure.

To talk to us about any of the services that we offer, please call 03330 433233.


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