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Managing Cash Flow in Your Business - Rule 2 - Don't be too lenient with your customers.

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Today, I am going to share with you the reason why it is important that you are not too lenient with your customers. This important concept forms Rule Number 2 of Managing Cash Flow in Your Business. Summary - Be direct and fair with your customers without being seen as a pushover. A clever but polite invoicing strategy will usually get you a long way. But don’t be afraid to take more formal action if you need to. Keep a close watch on your accounts receivable turnover at all times. If it’s trending up, it might be time to step up your efforts at chasing payment. As receivables age, their quality goes down, so you should act sooner rather than later. Cost of Acquiring and Retaining a Customer As we all know, obtaining customers can be time consuming and expensive. The cost of customer acquisition versus customer retention could reach as high as 700%, according to a report by Frederick Reichheld of Bain & Company as below: Acquiring a new customer can cost 6 to 7 times mor
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Managing Cash Flow in Your Business - Rule 1 Keep your books up to date and accurate

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Welcome to a new series of blogs for 2018 on managing Cash Flow in your business. There are five simple rules that will help you manage your company's cash flow better. Those rules are: Rule Number 1 - Keep your books up to date and accurate. Rule Number 2 - Don't be too lenient with your customers. Rule Number 3 - Keep your accounting simple. Rule Number 4 - Keep your business and your personal finances separate. Rule Number 5 - Build a cash reserve. Today, I am going to delve deeper into the first rule - the rule of keeping your boos up to date. Rule Number 1 - Keep your books up to date and accurate.  Often i get asked "why do i need to keep my books up to date? It is too time consuming and i cannot see any value in it." My simple answer to that question is: Your cash flow is only as good as your accounting and reporting.  Don’t feel alone, financial record-keeping is the bane of existence for most small business owners and managers. When
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Keeping your Cash under Control

Hello fellow entrepreneurs, Is money flowing out of your company faster than it's coming in? Take a moment to think about the following three questions. Do you manage cash flow successfully in your business?  Do you improve your internal process so as to maximise your cash flow?  Do you forecast your cash flow for the next three months? If you answered yes to at least one of those questions, then you are on the right boat. Trying to run a business without managing cash flow is like trying to paddle a boat without an oar. Even if you succeed, it will be an upstream exercise guaranteed to wear you out. Cash flow is important for all businesses, but it is critical for early startups. If you cannot manage your cash flow within the first year, you will likely not survive the second year. The management of cash flow is one of the most challenging tasks for small business owners. Having to continually nudge customers for payment uses up valuable time and can be dishearte
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Managing Cash Flow in your Business - March 2018 Edition

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Hello, Cash is the lifeblood of any small to mid-sized company, especially high-growth and/or highly leveraged ones. Still, many businesses struggle to maintain an accurate picture of current cash flow position and how that position will change in the future. Cash flow is a key indicator of financial health in your business. Without cash in your business, there is a good chance that your business will not survive.  The Small Business Administration says that "inadequate cash reserves" are a top reason startups and growing businesses don't succeed. It's called "running out of money," and it will shut you down faster than anything else. A common misinterpretation i hear often is that Profit = Cash.  Wrong!  Profit does not equal cash. There are too many variables outside of Profit & Loss Statement (Income Statement) that can impact upon your cash flow. Variables such as taxation payments, purchase of capital equipment and loan repayments do not
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Managing Cash Flow in Your Business - Rule 1 Keep your books up to date and accurate

Welcome to a new series of blogs for 2018 on managing Cash Flow in your business. In last month's blog, I mentioned that Cash is King is so critical for businesses starting up, growing or even exiting. At any stage of the business life cycle, cash is vital. Without cash, there is not a chance for business survival. I stated five simple rules that will help you manage your company's cash flow better. Those rules are briefly restated again. Rule Number 1 - Keep your books up to date and accurate. Rule Number 2 - Don't be too lenient with your customers. Rule Number 3 - Keep your accounting simple. Rule Number 4 - Keep your business and your personal finances separate. Rule Number 5 - Build a cash reserve. Over the next five weeks, I shall explain in more detail how you can implement these rules into your business. Today, I am going to delve deeper into the first rule. The first rule of keeping your books up to date. Rule Number 1  - Keep your books up to da
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Are you protected against online fraud? It can hit you sooner than expected.

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Hello my friend, Have you experienced loss of funds in your business through "unauthorised payments?" Not only is it embarrassing for your business but does create a lot of stress and perhaps, financial hardship. This situation should serve us a reminder to check our own internal processes to prevent this type of fraud which often, is not recoverable. It is not only large organisations that are vulnerable to misuse of their bank accounts, small businesses are regularly hit by unscrupulous use of their banking platforms. This mean it’s incredibly important to get the processes and procedures right. Every business (small, medium or large) should have its own internal processes and procedures in place to minimise risk. These processes and procedures should be tested and reviewed on a regular basis rather than waiting for an incident to occur before testing. By that time, it is too late. Warning Signs Fraud can be perpetrated from those outside of any organisation, but
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Suffering from client late payments? 6 steps to minimise late payments

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Hello fellow entrepreneurs, Clients not paying on time is a headache and some times a nightmare for any small business. Small businesses suffer significantly more than large businesses because they do not necessarily have access to reserves of cash or third party funding. Late payments are a global issue. Governments around the world are now starting to pay attention to this issue for small business entrepreneurs. As long as businesses have been sending invoices, customers have been paying them late. Here's how to speed them up with some great tips that you can adopt into your business today. 1 - Send your Invoice immediately. Your client can’t pay until you've invoiced them, so send your invoice fast. There is no logical excuse for invoices being prepared after the goods or services have been supplied. With today's cloud accounting software, an invoice can be prepared on site and sent from your mobile phone. 2 - Invoicing to be 100% error free. Make sure your i
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