Have you struggled with cashflow in the past? It’s something many businesses do struggle with, and it’s nothing to be ashamed of if you have. We want to see you make 2017 your year and help you tackle those cashflow problems once and for all.
Here are few suggestions for improving your cashflow in 2017.
- Control bad debts
Putting into place a practice where you systematically chase up overdue invoices is essential for every business owner. In addition to the obvious problem of no cashflow for you, late invoices can cause great client and business relationships to fracture. And many people find it uncomfortable to follow up on late invoices and will put off the conversation. Avoid these issues by having a black and white payment and follow up policy. We can also help you set up a system that automatically sends reminders to clients about upcoming payments.
You may like to look at giving clients who pay upfront, or with a deposit, an incentive like a discount, added value in their service, or annual gift. You should offer various payment options for your customers – it’s about being easy to do business with. Many banks have a suite of electronic payment options available to help small businesses collect payments faster.
- Undertake a cash flow forecast
Working for yourself can be incredibly rewarding, but one of the drawbacks is never being sure exactly how much cash is coming through your door at any given time.
Using data from your expenses and income, our team can work with you to undertake a cashflow forecast for the coming year. We can help estimate which months look like you’ll receive a surplus, and where you’re looking a little lean, and then put into place a plan to help balance this out. Often missed from forecasting and budgeting is making provision for things like tax liabilities, asset purchases or loan repayments which can lead to a serious hole in your cashflow and add to your stress levels.
- Out with the old
If you sell products, holding on to old stock can tie up some serious cash not to mention cost of insurance and storage. We often say to clients that holding on to excess stock is the equivalent of pinning $50 notes to your pinboard. Make sure you’re monitoring stock levels, have clearance sales when appropriate and ensure you’re regularly reviewing and renegotiating any supplier agreements. It can be a great idea to investigate bulk purchase discounts but don’t get carried away – if you can’t move it on quickly then the benefit is quickly eroded.
If equipment or parts is taking up space, not serving purpose or costing too much in maintenance look at selling or replacing it.
- Organise your books
A clear and organised bookkeeping system is the only way to see at a glance where your shortfalls are, if an invoice has been missed or a bill is late. This is your base to good business practices.
- Review your pricing and marketing
Too expensive, not expensive enough – the balance of finding the right price point and perceived value of your product is very tricky. Perhaps if not enough cash is flowing through the door you need to take an honest look at your offering.
Is it adding value for your customer? Is it meeting their expectations? Do they feel satisfied? Does it live up to your marketing promise? Are you doing enough marketing? Do you need to do more?
It can be confronting to look honestly at your business practices, but for long-term survival it’s essential.
The Atticus team is ready to help. Give our office a call to talk about cashflow, and get ready to achieve your goals in 2017!