10 top tips to spring clean business finances
Tracy Ewen, managing director of IGF Invoice Finance, provides 10 top tips to spring clean business finances. Shake off the winter blues and spring clean your business finances with these top tips below:
1. Plan, plan, plan! Prepare cashflow projections for next year, next quarter and, if you’re on shaky ground, next week. An accurate cash flow projection can alert you to trouble well before it strikes;
2. Stay in touch with your finance partners. Financial services providers are wary of borrowers who have to have money today. They would much prefer to lend to you before you need it, preferably months before;
3. Make sure all your invoices are correct before they are sent out to ensure your customers have no excuse for not paying;
4. Make sure you have a strong process for chasing up your invoices, and check those that have been outstanding for a while and try to get them resolved – even if it means writing off bad debts;
5. Review your processes – make sure you tell your potential customers upfront about your credit terms, before you provide your product or service;
6. Know your customers! Some of your customers will pay on time every time – others will be perennial late payers;
7. Don’t always associate higher sales with better cashflow. As receivables usually will not be collected until at least 30 days after sale, a substantial increase in sales can quickly deplete your cash reserves;
8. Consider using an invoice finance provider. These are financial services businesses that can pay you today for invoices you may not otherwise be able to collect for weeks or months;
9. You may be able to raise cash by selling and leasing back assets such as machinery, equipment, computers, phone systems and even office furniture. However, you could lose your assets if you miss lease payments;
10. If your cash flow has become stable and predictable, you can consider investing your excess cash. You can earn additional interest income, as well as have the necessary cash to dip into during tough times.
Tracy adds, “It may still be a mix of showers and sunshine outside, but in the business lifecycle, April is the perfect time to spring clean your business finances. Take some time to chase up those unpaid invoices, review your suppliers and credit lines. Now is the time to get things spick-and-span.”
This was posted in Bdaily's Members' News section by Tracy Ewen .