Business finances are the axle that rolls your business steadily forward. Without great financial management techniques, you could be losing money or holding yourself back from growing your business. Here are 5 management tips that can help to optimise your businesses overall financial well-being.
- Try an automatic pay system
Bills, payroll, payments to suppliers, and other financial draws can be hard to manage with many different accounts and a different system for each. Instead, try to streamline as many of your outgoing payments as possible with a service that manages them all. Working with an automatic payment system can be quite easy, and it provides a “one stop shop” for getting the money where it needs to be when it need to be there.
There are many options available when it comes to automatic payment systems, each suiting different needs, however Bacs is one of the most common types. Bacs allows you to easily manage all of your card transactions through a secure system and automation, meaning the fear of forgetting to pay can be revoked.
- Hire a forensic accountant to look for areas of waste
A forensic accountant can provide some excellent services for your business. Every so often, have the accountant comb through your liability statements, profit and loss records, payroll records, and order forms. They can help identify areas where you are overspending in the business world and discover where you might be losing money. For instance, a forensic accountant can let you know if an employee is stealing materials or funds or find suppliers who are overcharging.
- Bank with a company that knows your needs
While large banks offer shiny bonuses and incentives for businesses, it can often be more advantageous to use a local bank. Using a local financial institution means that the bank will know the needs of the area, and therefore will be more understanding of special circumstances. Before making a decision, explore all of your options and compare them all closely. Make comparisons that outline what each of them offer, their banking charges and facilities.
- Outsource non-emergent, but still important, tasks
Sometimes, business owners feel like the they need to take care of everything on their own. However, as your business grows, you’ll soon find yourself stretched too thin. You could hire more help, or you could outsource some of your work. Outsourcing is useful because you don’t have to worry about the expense of an employee. Some tasks are better outsourced anyway: IT work, customer service calls, basic maintenance, website hosting, and business accounting are just a few things that you could divert to somebody else.
Take a look at your needs, and consider moving some of your work to established companies that specialise in the field. Your customers will get better service, and you’ll save money on hiring your own full-time IT guy.
- Provide incentives for full and continued payment
Many businesses offer services that the average income cannot afford up front. To get around this, you could offer payment plans and discounted rates. However, if too many people take advantage, you’ll be hurting your cash flow. Try to provide incentives for those who pay the full amount for your goods or services right away, as well as rewarding regular customers. Offer discounts for orders that are paid in full within 30 days, and charge interest on payment plans.
You can also encourage people to become long-time customers. Offering discounts to new and existing customers is a great technique used to increase sales, for example 20% off when you place 3 orders may encourage people to keep investing in you.
Finance is something that simply cannot be ignored in your business. Managing it ineffectively can be detrimental, thus it’s vital that you implement some of the above techniques to streamline operations and maintain a positive cash flow. If you start today, you’ll soon begin to see the benefits.