Just as it’s never too late to adopt a healthy and active lifestyle, it’s always a good idea to look at ways in which you can improve your business health. Even small changes can make a big difference over time.
Here are our top tips for getting your business in great financial state:
Cash flow is key
Knowing exactly how much money you have coming in and going out of your business is vital. Sadly, many small businesses suffer from late payments slowing down their cash flow.
“Keeping an eye on what I spend money on and when has without a doubt been a major reason why we are still in business after three years. You have to know how much money is in the bank, when money needs to go out and when you can expect money to come in.” – Jules Quinn The TeaShed
Our research shows that the average small business in the UK is owed £12,000 in outstanding invoices and that the same businesses spend around 336 hours a year chasing payments.
Get paid faster
We’re also making it easier for businesses to get paid faster, by switching from cash and cheque to card and electronic payments with Sage Pay.
Customers increasingly expect to be able to pay for goods and services. One in six consumers say they wouldn’t make a purchase if they couldn’t pay by card.
By switching to electronic payments your business can:
- Get paid 50% faster
- Get paid twice as quickly by adding ‘Pay now’ buttons to your invoices
- Offer customers more choice
Promote prompt payments
Review your credit terms. If you have frequent late payers, it may be time to reduce the length of their terms.
Set a good example by making prompt payments to your suppliers. If you’re a good business customer, can you negotiate a discount or preferential terms?
Cut the admin
Sometimes it’s the little things that can save you time. Take expenses for example. Managing paper receipts and invoices from your suppliers doesn’t need to be a hassle. Simply scan or take a photo of your paperwork and many online solutions will automatically extract the figures you need.
Keeping track of all your business finances on the go from your laptop, smartphone or tablet can also help you save hours on admin too.
Get set for legislation
There are some things you can’t avoid, so it makes sense to be prepared. One new piece of legislation that will affect small businesses that employ people is automatic enrolment.
It applies to any business that employs people and provides and contributes to a workplace pension. From June 2015, this applies to businesses with 30 employees or fewer and the Pensions Regulator strongly recommends that you plan well ahead.
There are financial penalties if you don’t get your workplace pensions sorted and your people informed by your staging date, so it pays to get ready.
Review and reflect
What’s going well and what could be going better with your business? Take some time to review things like costs, expenses, profits and customer feedback.
Be objective and look at the figures. It’s not just about looking where you could save money, but where there are opportunities too.
Think about where your business is now and where you would like it to be next year. Then plan how you’re going to make that happen and set a budget.
Make sure to read our financial advice, on maintaining a healthy cash flow. We’ve got helpful tips on keeping you’re finances running smoothly.