When consulting with my clients, the main challenges I come across to innovation and business improvements are mostly: Lack of Money, Low Profitability and Financial Pressures.
Many of these challenges can be overcome by these “Five Important Money Tips”:
1. Invoicing – Be clever and send out invoices promptly:
Many small business owners do not have a discipline in place to invoice their customers for goods or services promptly. Getting smart with invoicing means getting your money and that’s essentially the secret of successful business. Set your payment terms on the invoice to 7 days maximum to ensure payments aren’t lost or forgotten. Set auto reminders for yourself to follow up on time. Make record tracking as easy as possible to ensure customers payments and correspondence are in synch.
2. Accounting Software – Automatic bank reconciliation.
The advance of cloud based accounting software like XERO has some really fantastic and versatile solutions that are perfect for small businesses. The days of manually dealing with invoices are slowly disappearing. XERO does all that for you, summarizing incoming and outstanding invoices and automatically updating and marking invoices as paid as soon as the relevant cash comes in. This is by far the easiest way to minimize debt and maximise positive cash flow through management of incoming and outgoing funds.
3. Accept Credit and Debit Cards on the Spot
The modern world is all about being mobile, it pretty much defines the way we communicate, consume, shop and importantly make payments. The smart business owner needs to take account of this and make payments truly mobile. Using a mobile eftpos machine will change the way you run your business, meaning customers can be asked to pay on the spot. The rental cost of each eftpos machine is soon offset by not having to chase outstanding invoices. It’s an absolute no-brainer for progressive business owners.
4. Accept Credit and Debit Cards over the phone.
Many business owners have discovered how much time is saved by offering customer service and accept (or request) payment over the telephone. Simply ask customers for their credit or debit card details and put the payment through a clever virtual online terminal. It’s a great way to secure payment made at the customer’s convenience.
5. Managing your Payments – they are the lifeblood of your business
We have a saying that “Cash is the lifeblood of business”. Equally managing creditor’s payments is as important. If your business is the center of your world, as is the case with most business owners, then managing payments is the best way to understand its ins and outs, strengths and weaknesses. Knowing the state of your financial affairs backwards is the sure way to avoid unforeseen debt, keep that cash flow positive and use it to invest and grow your business instead of bailing it out!
So, dive in, review, forecast and crunch numbers, dream big and watch the rewards roll in!