April brings a very busy time for businesses, it is the end of another (hopefully successful) financial year meaning accounts need to be updated, checked and filed with all the necessary documents, however it also brings the beginning of a new financial year. With such a busy time, important tasks can fall to the wayside. Many SMEs struggle with cash-flow and so Commercial Domestic Investigations wanted to share some tips to ease the pressure.
Keep track of your cash-flow
A cash-flow forecast may seem like something you use as part of a business plan and that’s all but it can be a very useful resource when it comes to planning for the upcoming year. Planning your cash-flow on a monthly basis can help you anticipate any problems like slow business months.
It can be a difficult to decide whether or not to issue clients with a line of credit. Be as careful as possible and carry out credit checks on all clients, this will give you an idea of their payment history and if they are a good candidate for credit.
Along with your usual contract, clients can complete a credit application. This will give your business some security when ordering products or performing a service in advance of payment. Requesting a deposit or partial payment can help ease your cash-flow.
Spread your invoices
A lot of businesses make the mistake of invoicing all of their clients at the end of every month. This can leave them open to potential cash-flow issues if a client doesn’t pay on time or an unexpected expense crops up. Spreading invoices out over the month means that cash-flow is more stable.
Monitor your debtors
Set aside a certain time every week to chase your debtors. Staying on top of overdue accounts means that you can deal with any issues as efficiently as possible. It may be that a client has simply forgotten about your invoice but it may be that the customer is facing more difficult issue with their cash-flow. Checking in with them on a weekly basis means that you can make other arrangements if necessary.
Put some cash away
As cliché as it may sound even a business should save for a rainy day, put some money away to cover your VAT, PAYE and corporation tax. This will put your mind at ease when the bills start to arrive. If you have a particularly profitable month, consider making an additional payment to your savings.
Look after your clients
Take care of your existing clients, they are the people that support your business, bring repeat custom and refer other clients. Happy, loyal clients are more reliable when it comes to payment so ensure that you spend time nurturing your relationships. If you are not sure how you can improve your relationships, read our blog on “Strengthening business relationships”.
At Commercial Domestic Investigations we understand how important it is to have a stable cash-flow from which you can run your business. We know how busy you can get, especially at the start of a new financial year. If you are struggling to stay on top of your credit control then contact our team on 08444 159200 or email firstname.lastname@example.org to find out how we can help.