1. First and most importantly you should be on the best accountancy software. Software’s such as Xero are ideal for SMEs. Xero lets you manage your finances in real-time and increase efficiency.
2. There are apps in the market such as Chaser that are great for incorporating a credit control process which is great for consistent, persistent, and polite payment reminders issued to your clients.
3. Reconsider the payment terms you offer to your customers. For example, if you offer your customers 30 days EOM terms, however, the majority of your suppliers give you 30-day net terms; you are going to struggle short term with cash and paying your suppliers as you are still waiting for payment from your customers.
4. Get receipts in quicker. Offer a ‘Pay Now’ option to your invoices using apps such as GoCardless.
5. Set up an automated bill approval process to increase efficiency and financial control, such as ApprovalMax. This means that no bills will get paid that have not been approved or are in query.
6. Outsource your business’s financial needs. By outsourcing your bookkeeping and accounting, you will receive the same attention from the bookkeepers and accountants you would receive if they were hired internally, but you will receive individuals with vast experience and knowledge of different processes.
7. Maintain a rolling 13 week cash flow forecast that is updated daily or weekly to prepare you for the months ahead, giving you the confidence to make informed decisions for your business. The SAS Virtual Finance Team are experts at managing cash flows on behalf of clients.
8. Performing a credit check on potential credit customers/clients is always a good option. It could help you appropriately determine the credit terms with the customer. I.e. If their credit score is not that great, but you still want to trade with them, then raising invoices on a proforma basis will help your cashflow and will prevent the risk of debt becoming aged & potentially being written off.
9. Using apps such as Dext will streamline your purchase and payment process. With Dext, bills will automatically be uploaded onto your accounting software with all the data extracted correctly. This will mean that you will not have to manually input any bills & have more free time to deal with other important tasks, such as getting in more business.
10. Creating a sales & purchasing budget and comparing your actuals against the budget throughout the year. This will allow you to see how your company is performing and what you need to do to improve the profit going forwards.
Looking for more information or need support with your cash flow? get in touch with our Virtual Finance Team.
