Could 2015 be the year that your business gets its finances well and truly into shape? With the economy continuing to grow and many firms likely to see higher demand for their products and services, there's no reason why not.
Review how your business is financed
Is your enterprise financed as efficiently as it could be, or needs to be? There are many funding options available that could deliver big benefits for your firm.
Invoice finance, for instance, can give you quick access to sums that you are owed, while asset finance options like hire purchase allow you to spread the cost of acquiring an asset over time.
Businesses with ambitions to expand in 2015 should dedicate time to researching the various funding streams on offer and evaluating their respective benefits. A commercial mortgage could be the way to go if you are planning a physical expansion into new premises, while business loans can prove invaluable to firms that need some extra capital to get their next big project underway.
It is also worth looking into different types of alternative finance, from crowdfunding to innovative, flexible products from challenger banks.
Are you with the right bank?
It's easy to stay with the same bank out of habit, but if you don't feel like you're benefiting from the relationship, see if you can find a better offer elsewhere.
Start by listing the things that are most important to you when it comes to your banking services. In the modern business environment, digital facilities and connectivity are hugely important, so you might want to choose a provider with top-quality internet banking provisions.
You should also compare the costs involved in dealing with different banks, focusing on any monthly or quarterly fees and charges for actions like making deposits, transferring money and settling bills.
Depending on your priorities, you might also want to assess the overdraft facilities available from various providers, along with added features such as specialist advice on how to manage your account, fund growth or expand your business.
Failing to control costs can be a serious problem for businesses of all sizes. Without careful management, your various expenses and overheads could spiral out of control and wipe out your profit margin.
One of the first steps to take when trying to get your costs under control is reviewing and renegotiating contracts with your suppliers. Don't assume that long-term contracts will work out cheaper; always question the fairness of what you are being charged and see if you can save money by making changes.
You should also be constantly reviewing the amount you spend on labour. If your company is growing, look into improving the efficiency of your working methods through technology or process changes, rather than rushing into hiring more staff.
Late payment is a prevalent problem in the business world and it is having a severe impact on small and medium-sized enterprises (SMEs).
Two-thirds of SME members of the Institute of Directors have experienced difficulties in securing timely payment of invoices, according to a recent survey.
Late payments for products and services provided makes it difficult to maintain a healthy cash flow within your business, so it is imperative you do everything you can to avoid late payments from suppliers.
Firstly, make sure your invoicing process is clear and consistent, with payment terms included on every invoice.
You can also reduce the risk of late payment by running credit checks on new customers, not accepting cheques and keeping in touch with clients to verify that invoices have been received and there are no queries.
Once a deadline passes, chase the payment.
If the problem persists and clients are showing no signs of paying imminently, then speak directly to the client and if required arrange meetings and the address the problems. If this doesn’t help then seek legal advice.
Boost efficiency through technology
The endless growth of technology means there are all sorts of hi-tech applications and solutions available to modern businesses, many of which can help you improve your financial efficiency.
Could you use a cloud-based accounting system or mobile app to improve your invoicing processes, for instance, or a service like Experian to check the details of clients and their credit records?
Re-evaluate your current systems and operations to cut down on unnecessary bureaucracy, duplications and other inefficiencies that might be affecting your productivity.
Your company could also benefit from using VoIP and online video calls instead of mobile and fixed-line phone communications, as well as utilising the flexibility offered by cloud computing and automating processes to free up time for staff.
We're living in an age of unprecedented technological advancement, and the companies that are most capable of turning this to their advantage are the most likely to succeed in the future.
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