Renae Pitargue, Author at BUSY01 and First Class Accounts Ovens and Murray - Page 4 of 17

All Posts by Renae Pitargue

What do you want from your business

What do you want from your business?

When you started your business, you probably dreamed about flexible hours and highly profitable, stimulating work.

Ideally, you would’ve adopted best practice and documented those dreams in a succinct Business Plan. Your plan would specify how much cash you need, your role, and the hours you’d be working.

In other words, what your business was going to deliver to you personally as an owner.

But that was all before the world turned on its head and most plans went out the window.

Whatever you previously dreamed of or planned for must be reconsidered due to the impact of Covid.

It’s likely that what you want hasn't changed, it will probably just take longer than expected.

Take the opportunity to reinvent your business to deliver what you want 


Trimming what you need personally from your business for the next year or two will give you the best footing to recover.

Consider the following:

  1. Can you still have the lifestyle you want with less cash strain on your business?
  2. A walk with friends, as opposed to a dinner out, is great for your health and easier on your wallet.
  3. Are there personal costs that can be avoided? Do you need that second takeaway coffee each day?
  4. Can you refinance your personal and/or housing debts to achieve lower interest rates or reduced principal repayments?
  5. Can you spend less on holidays or travel in the next 12 months?
  6. Can you modify your role in the business to reduce stress or workload?
  7. Will these needs be different in the medium term? I.e. can you hunker down for 12-months or until your business’s profitability and cashflow improve?

The best way to reduce the cashflow strain is to revise your personal budget. 

Your budget will identify potential savings you can make and provides a benchmark against which your actual spending can be tracked in the future.

 Your Business Plan and budget can then be built around how your business can deliver the level of personal cashflow you need.

There are no shortcuts here. 

The discipline of personal budgeting with ongoing monitoring of your expenditure is essential.

The good news is that the process is both empowering and enlightening at the same time. You’ll be amazed at where personal savings can be made and will feel much more in control of your business.

Contact us if you need help developing your Business Plan or personal budget.

“You must gain control of your money or the lack of it will forever control you.” – Dave Ramsey

5 signs you’re undercharging

5 signs you're undercharging

Are you undercharging for your services?

It can be hard to tell, particularly if you’re in a niche industry or you’re a contractor. Costs have been rising, so it may be time to rethink your own pricing.

Here are five signs that you might be undercharging:

1. Nobody ever questions your quotes

Do all your new clients accept your quotes or charges without asking any questions, requesting a breakdown or wanting a discount? It’s possible they’re delighted to be getting such a great deal.

2. You run off your feet but you can’t afford to get help

When you’re working yourself to the bone, but there’s not enough money left over to employ someone to help you, your prices are too low – or something else needs to change.

3. Your prices have been the same for two years or more

In most industries, prices increase just slightly each year. Leave your prices flat for too long and you’re not keeping up with the market; make sure you review your fees annually.

4. You’re overbooked

When business is booming and there’s no room for new clients, it’s time to raise your prices.

5. Clients don’t treat you as well as they should

When clients think they’re paying peanuts, they’ll often take you for granted. They don’t see your time as valuable, so they feel free to mess you around.

What should you be charging?

Finding your pricing sweet spot could take a little time. You’ll need to do some research, maybe ask around a little, and find out where your competitors are pitching their rates.

We can help

We work across various industries and therefore may be able to give you some indication of typical fees. So get in touch.

How do you get your outstanding invoices paid?

How do you get your outstanding invoices paid?

Do you dread following up outstanding invoices?

It can be frustrating when you have customers who haven’t paid their invoices. Not to mention the impact on your cash flow.

Getting paid on time is essential to good cash flow. But how do you get paid?

Here are some simple, effective techniques that can help you get your outstanding invoices paid.

Make sure your terms are clear

Write into your terms of service that you will charge a late fee for overdue invoices. Make sure you your customers are aware of your terms of service before you do the work.

Also, we recommend doing a credit check before you do business with a new customer. This can help reduce the risk of late payments and defaults, as well as minimising the need for follow-ups.

Reminders

Often, the payment is a simple oversight. By resending the invoice or sending a simple payment request an outstanding invoice will be paid. Start there, and you might be surprised by how many outstanding invoices are paid.

Better still, set your accounting software up to send automated reminders to customers with outstanding invoices. Talk to us about how to do this.

If the above action doesn’t achieve the desired result, ie your outstanding invoice being paid, it’s time for firmer action.

As uncomfortable as it can be to make a phone call to ask for payment, it can be one of the most effective ways to get paid. Perhaps start with asking are they aware that their invoice is outstanding.

A stronger stance

So, what do you do if your customers don’t respond to your polite requests?

If you have been waiting for payment for months, it’s time take a stronger stance.

This could include:

  • stopping your services until payment is made
  • using a professional debt collector
  • bringing in your lawyer

While you will likely get paid by taking this stronger stance, you do need to consider the potential impact on the relationship with your client. How important is it? Do you want to continue to do business with them? Is it worthwhile continuing to do business with them? 

If you need help managing your outstanding invoices, get in touch for expert support and guidance.

managing finances in your business

Managing finances in your business

Managing finances in your business

When you are busy running a business getting your head around effective financial management can be difficult.

If you get it wrong you could end up focusing on the wrong things that are detrimental to your business.

As a business owner, there are four basic areas that you need to consider when managing finances in your business:

Have a plan

It’s important to have a plan to you understand your business expenses, project your revenue and be able to track your finances.

Having a plan allows you to track and review your profits and losses, outstanding accounts, payroll expenses and more.

You should review your plan regularly so you have a clear understanding of your business financials and are able to forecast accurately.

We recommend using online software, like Xero. Online software helps you keep accurate and up-to-date records and is a more efficient and time saving way to stay across your financials.

Cash flow

We’ve said it before and we’ll say it again. Cash flow is the lifeblood of business.

By understanding and tracking your incoming and outgoing cash (or cash equivalent), you can gain insight into trends over time. This gives you more understanding of, and therefore control of, your cash flow.

And that means you can use forecasting tools, like Futrli, to identify opportunities to make adjustments to help prevent fluctuations in your cash flow.

Debt

If you have debt associated with your business, and let’s face it – most of us do, it’s essential to keep an eye on it.

Borrowing isn’t necessarily a bad thing, but it’s important to make sure the benefits of going into debt outweigh the costs.

On the flip side, if you’re owed money, it’s vital to closely manage unpaid invoices and secure any money you’re owed in a timely manner. Read more about having a watertight accounts receivable process here.

Growth

Growth is great, but it does need to be manageable.

When you are looking at growing your business or taking on new clients, work out if you manage the additional work and how it will affect your current setup. What additional resources, tools, personnel, financial investment will be required? And (like taking on debt), will the benefits outweigh the costs.

Successful financial management isn’t necessarily about the specific decisions you make. It’s about understanding the impact your decisions will have on your business.

Talk to us about the Apps and tools available to help you manage your business finances.

5 ways to improve your cash flow

5 ways to improve your cash flow

5 Ways to Improve your Cash Flow

In our last blog, we discussed ways of managing your cash flow. We know that cash is the lifeblood of any business, so here are 5 more tips to help you improve your cash flow.

 If the cash dries up, problems quickly begin to multiply. By keeping the cash running freely and you can continue to grow your business.

Here are five tips for improving your cash flow:

1. Have a system to manage your debtors. 

Come up with a clear, step-by-step way to handle outstanding accounts. This might include:

  • automated reminders on unpaid emails
  • a phone call or email when the amount has been outstanding for a certain period of time
  • a stop credit on the client when they exceed an acceptable payment time.
2. Be prepared for tax time 

One of the fastest ways to run out of cash is to find yourself short at tax time. Talk to your accountant about tax planning measures you can implement to ensure you can make your compliance and tax obligations. 

3. Try not to dip into business funds for personal spending

It’s always tempting to tap your business account for personal spending. Instead, try to keep them separate. If you’ve over-saved at the end of the tax year, you may be able to draw down a nice bonus. That’s much better than being caught short.

4. Sell old stock

Too much stock? Consider old stock, old furniture, machinery or even stationery: they can all be sold to free up space and provide a small cash injection.

5. Forecast your cash flow

Create a cash flow forecast (we can do this with you) and that will help you monitor and measure the flow of cash in and out of the business.

Need help with forecasting or cash flow management? We’re here for you. Feel free to get in touch.

Managing better cash flow

Managing Better Cash flow

We all know that cash flow management is vital for a growing business. But where do you start?

Here are six steps to managing better cash flow.

6 steps to managing better cash flow

1. Invoicing

Invoicing is a good place to start your cash flow management.

In other words, invoice your customers as soon as your product is sold or your service is provided. The quicker you invoice, the quicker you should get paid. Also consider asking for a deposit up front – especially if you’re a service provider or your product has a high-end price.

As we mentioned, invoicing is only the start of your cash flow management. Here are five other steps you can take to improve your cash flow management.

2. Know your numbers

We understand that not everyone is confident with numbers. That doesn’t mean you shouldn’t know your numbers.

Having appropriate accounting software in place, like Xero, will help you always know your cash position. The right software will also help you forecast your cash flow.

Having a good handle on your business numbers will not only help you manage your cash flow, it helps you take advantage of new opportunities.

3. Keep your numbers current

We mentioned having the appropriate accounting software in place. But that software is only as good as the information you provide it. Keep your information up to date so you know the financial state of your business at any time.

If you don’t have the capacity or capability to manage your accounting software, then outsource to a qualified bookkeeper. We will manage your books and provide insights and forecasting so you can better know your numbers and focus on your business.

4. Don’t be a pushover

Make sure your invoices are paid on time and don’t be too lenient with your customers. Keep an eye on your accounts receivable and have an invoicing strategy for any overdue accounts.

You may sometimes need to understand your customers challenges, but that doesn’t mean you should be taken advantage of. Be prepared to act sooner rather than later.

5. Save for a rainy day

Sometimes quick access to cash can make or break your business. Saving for the proverbial rainy day (in other words, building a cash reserve) can provide you with that access if unexpected expenses occur. Or an opportunity arises to invest in your business that’s just too good to pass up.

6. Separate business from pleasure

It’s essential that you keep your business and personal finances separate. Especially if you want to know your business numbers so you can manage and forecast your cash flow effectively.

Cash flow is king

Yes, “cash flow is king” is an expression we hear all the time. And there is a reason for that. Managing your cash flow effectively means that your “cash” serves you and helps you build a successful business.

If you need help managing your cash flow, talk to us.

Accessing business funding

Accessing Business Funding

Cash is the fuel that powers your business. But, does your business have enough capital in your company to actually fund your short, medium and longer-term goals?

Whatever your business aims are, you’re likely to need some additional finance at some point along the business journey. But, how does this extra cash then benefit the growth, scaling up and (eventually) the sale value of your business?

The value of extra capital in the business

Third-party business finance comes in many forms.

It might mean talking to your bank about agreeing an overdraft extension, or taking out a business loan from a business funding provider. It may even mean looking at specialist finance products, such as:

  • asset finance (for buying new equipment)
  • invoice financing (for quickly raising cash from your outstanding invoices)
  • government-backed grants and tax incentives for enterprising businesses.

Whatever finance route you take, it’s important to understand the impact that this extra capital will have for your business. And for your longer-term success.

Accessing business funding

Accessing business funding provides a number of opportunities for your business.

Boosts your working capital

Funding gives you the liquid cash needed to stabilise and expand your operations.

With enhanced working capital, you can overcome your post-pandemic cash worries and get your balance sheet looking healthy once again.

You can also take on new work, projects and customers, safe in the knowledge that you can cover the initial expenditure while waiting for new revenue streams to bear fruit.

Provides investment in your growth strategy

If you’re looking to expand your operations or scale up the business, extra funding gives you the capital to invest in this growth.

You have the capital to take on more people, to invest in equipment, plant and new technology, and to scale up the overall capacity of your business.

Strengthens your company's balance sheet

The health of your balance sheet is determined by the balance between your assets (the things you own, including cash, within the business) and your liabilities (the debts that you owe other people).

Additional funding in your business helps to:

  • increase your assets, which, in turn, helps to boost your working capital and liquid cash
  • enhance your asset performance
  • improve your capitalisation structure as a viable business.
Makes your company more valuable

With more cash in the bank and more capital to draw on, your company becomes a more valuable, and a more attractive proposition in the marketplace.

This healthy financial position is invaluable when approaching lenders for more funding, when buying out a competitor or even when selling the business and bringing your exit strategy into play as the owner.

However, if you’ve taken on private investors to provide part of your funding, you do have to consider that these investors will likely now own shares in the business – limiting your overall ownership and control of the company.

Whatever the next stage is for your business, the journey will be easier with a robust, tailored funding strategy behind your business plan.

Talk to us about creating a tailored funding strategy

10 ways to improve your margin

10 ways to improve your margin

10 ways to improve your margin

Improvements can always be made at the margin. Small tweaks to your processes or systems can make a massive difference to the end result. It’s the same with your business margin; a 1% increase in your gross margin on $500,000 of sales is an extra $5,000 on your bottom line.

The best part about improving your margin is that you increase your profit without needing to lift your sales.

Here are 10 ways to improve your margin

1. Negotiate better prices with your suppliers.

As they say, ‘the squeaky wheel gets the oil’, so if you don’t ask, you won’t get.

2. Update your pricing model.

Make sure you’re using the most recent supplier prices and that all costs are included in your price.

3. Back cost jobs regularly.

Review exactly what you spent on 2-3 jobs each month and compare the actual cost to what you anticipated the cost would be when you quoted the job.

4. Get rid of slow-moving items or work that has a poor return.

Selling old stock at cost will drop your margin, but if you replace those items or jobs with higher-margin items, you’ll achieve a higher return in the long run.

5. Set budgets and targets with your team.

Give your team something to aim for. Celebrate success when the targets are achieved.

6. Report your results on a cloud-based, real-time system.

You can’t manage what you don’t measure! Regularly monitor your most important Key Performance Indicators on your dashboard.

7. Reduce wastage and re-work.

What processes need to be updated to help reduce wastage and re-work? Or, if the processes are correctly documented, what training do you need to provide to your team to ensure the processes are being followed to reduce wastage and re-work?

8. Review your sales process.

Does your sales team know which products or services have the highest margin? Do they know how to upsell to those higher-margin products or services? Identify the sales skills gaps in your team and implement training.

9. Make a plan.

There are plenty of areas for improvement in your business. Unless you write them down, you’re unlikely to bring the correct focus to them. Make a plan to improve one area at a time.

10. Involve your business advisors.

Not only to help you with idea generation and building a plan, but also to hold you accountable to do the things you need to do.

We can help you lift your margin. Contact us today!

"To improve is to change; to be perfect is to change often." - Winston Churchill


The benefits of offering online payments

The benefits of offering online payments

Did you know the easier it is for people to pay you, the faster you will get paid?

So, how easy do you make it for your customers to pay you?

One of the best things about the digital world is the ability to pay online. And businesses that offer online payments get paid faster.

If your customers can make an instant online payment, they’re likely to pay you more quickly – and they’ll appreciate the simplicity too.

What are online payments

In simple terms, online payments are the methods you offer so your customers can pay you on-line.

Different online payment methods include services like Stripe or Paypal (known as an Automated Clearing House or ACH), credit and debit cards, online wallets like Apple Pay and Google Pay, and recurring payments through direct debit (either from a credit/debit card or bank account).

The right set of payment methods not only offers your customers payment flexibility and convenience, they also reduce the chance of fraud.

It’s important, however, that you choose a provider that can integrate with your accounting software.

Talk to us about integrating the appropriate online payment method, for example, Stripe or Go Cardless, into your business.

What are the costs of online payments

Most online payment service providers won’t charge any set-up fees. However, they will charge transaction fees.

Transaction fees usually range from 2-4% of the payment amount for credit cards. Direct debit transactions are usually a fixed amount - often under $2 per transaction.

On large-ticket items or services, some businesses don’t like to offer online payments. This is because the fees can add up. However, if you include these fees in your profit calculations and offer online payments for these large-ticket items, that point of difference may be the difference between making the sale or not.

What are the benefits of online payments

At the end of the day, businesses that set up online payments get paid faster.

Offering online payments can be a point of difference for your business (especially if you have big-ticket items or services).

Online payments allows you to reach more customers globally.

Offering the right mix of payment options can increase the chances of a purchase.

If you want to add online payments to your business offering, talk to us about integrating the appropriate online payment method into your business.