Business Tips Archives - Page 2 of 13 - BUSY01 and First Class Accounts Ovens and Murray

Category Archives for "Business Tips"

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.

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.

Should I focus on profits or cash flow?

Should I focus on profits or cash flow?

Turning a profit is at the heart of running any successful company. But should profits be the only financial focus if you're looking to create a stable, long-term business?

Cash flow is the beating heart of your business. Without an even and predictable flow of cash into the company, you can't cover your overheads, you can't pay your employees and you can't run your day-to-day operations – let alone think about expanding and growing the business.

So, what’s needed is a healthy cash flow position AND a good focus on driving profits.

Keeping on top of the financial management of your business can be hard work, especially if you’re new to accounting and the technical terms that are used to talk about money.

Understanding your finances

But if you’re going to be in control of your financial destiny, it’s important to get your head around the important process of cash flow management. This is especially true in the current business landscape, where sales revenue may be less buoyant, cash can be tight and the market is going through a challenging time.

Let’s look at some of the key things to understand about your finances:

Profit is a by-product of a successful business

As the owner, you want to make profits, but profitability isn’t the only goal. A business can easily be profitable, but also be highly unstable in the longer term. What you want is stability and consistent revenues.

Cash flow is the blood that keeps your business alive

Good revenues (income) serve to bring cash into the business. Without cash to cover your operating expenses, you have no means to keep the lights on in the business. So cash really is king!

Know your cost base and overheads

The flipside of your cash flow position is your costs. In an ideal world, you want more cash inflows than cash outflows, so it’s important to know your expenses and costs and to manage them carefully.

Be proactive about spend management and easing expenditure

If you can take action that reduces your spending, that is hugely positive for your cash flow position. Choose cheaper suppliers, negotiate better deals and bring that cost base down.

Drive more revenue, through increased sales and marketing activity

If you can increase your revenues, you also boost your cash flow. So it’s important to be proactive about running targeted sales and marketing campaigns to increase your sales.

Keep the cash flowing and the profits take care of themselves

If you achieve the ideal cash flow position, the company sits on solid financial foundations, the cash is there for investment and the business can grow. It’s that simple.

Talk to us about improving your cash flow management

Whether you’re new to running a business, or a seasoned owner who needs some financial support, we can give you the cash flow advice you need.

We’ll review your finances, delve down into your cash flow and will come up with key ways for you to increase your cash income and reduce your cash expenses. It only takes a few small changes to achieve a far better cash flow position for your business – helping you maintain positive cash flow AND generate meaningful profits.

Get in touch to talk through your cash flow concerns.

vaccinations and the workplace

Vaccinations and the Workplace

Vaccinations and the Workplace

The Fair Work Ombudsman (FWO) has released guidance for employers on vaccinations and the workplace.

Currently, there are no laws in place that allow employers to order existing employees to be vaccinated against the coronavirus. The Australian Government policy is that vaccinations are voluntary. Each state and territory government is responsible for implementing vaccination plans.

There are some circumstances in which an employer may require existing or potential employees to be vaccinated, but most employers cannot enforce vaccinations. If there are state or territory laws that provide specific orders requiring vaccination of certain workers, then employers and employees must comply. However, the FWO states that no such orders exist right now.

Employers need to check Fair Work Act workplace protections and discrimination protections before making changes to any employment agreements to require vaccinations. Employers should also discuss any proposed changes to agreements with employees, including options for implementation and safe work practices.

The Fair Work Ombudsman COVID-19 Vaccinations & the workplace webpage has detailed information explaining rules about many aspects of vaccinations in the workplace. Visit the webpage to get details on when an employee can refuse, asking for evidence of vaccination, disciplinary action and lawful directions.

The Department of Health has a great tool to check eligibility for priority vaccinations for high-risk workers such as emergency services, border services, frontline healthcare or aged care and disability workers.

Safe Work Australia provides industry-specific information, including risk assessment and worker consultations. An employer has a duty to eliminate or minimise the risk of exposure in the workplace by cleaning, distancing and hygiene information.

Many employment situations may require legal advice before the employer can make any changes to vaccination policies.

Don’t get caught out by making unlawful changes to your workplace! Review your employment agreements and look at your options for keeping your workplace safe.


7 ways to save time and money in your business


7 ways to save time and money in your business

We all know that time is money. So, it’s worth finding ways to reduce those tedious and repetitive tasks. And technology is the answer.

How can technology help?

Here are 7 ways to save time (and money) in your business.

1. Automate your invoicing

While invoicing is a vital part of running your business, it can take up a significant amount of your time. Using a digital/cloud accounting system to extract data from supplier emails and auto-populate your invoices can save hours each week. You can also use cloud accounting systems to set up recurring invoices and timely payment reminders, saving your more time.

2. Simplify your expense claims

If you have a manual expense claims process, implementing a digital automated process means your team will save time submitting receipts, approving expenses and dealing with any mistakes.

3. Reduce human error

It’s well known that manual data entry brings a high risk of error. You can eliminate this risk by automating key manual data entry tasks. And that allows you to spend more time on data analysis so you can make better decisions.

4. Automate approvals

Streamlining your bank reconciliation with an automated platform means you don’t waste time manually approving individual transactions.

5. Up to date payroll

Keep staff details up to date and calculate tax contributions within your accounting software. You’ll save significant chunks of time and you’ll avoid mistakes.

6. Accurate information for tax

Instead of Excel spreadsheets, receipts and physical documents, by using cloud accounting software. the information needed for your accountant to complete your tax is accessible through your software.

7. Better access to business data

With smart software and cloud based apps and add-ons, you get accurate business data wherever and whenever you need it. No more going back to the office to check a number, getting back to clients with final details, or reworking quotes because the numbers were wrong.

So, if you want to save time(and money) in your business talk to us about setting you up with the right systems.