Good cashflow management is vital for small businesses – careful management can keep you afloat and put you in the best position for growth. So it’s important to implement cash controls for small business success – here are 9 simple tips for how to save and manage cash in your business.
1. Use software to help automate tasks
It may sound counter-productive, because software often requires a subscription, but if it saves you time and hassle in the long run, you’ll spend less money on admin. From accounts software, to Customer Relationship Management systems, you can move your business to a new level without spending more than you need to.
2. Check out your existing service contracts
Paying for IT support? Office cleaning? Third party systems? You could get all your services cheaper just by shopping around, or potentially by pooling with partner businesses to get a discount. Make a note in your diary of when your various contracts expire so that you can look for cheaper deals and still give notice on your old accounts without incurring a penalty.
3. Price-compare your utilities
If you’re not tied into certain utilities by your landlord, check if you could be getting things cheaper. Switching suppliers is easier than you think now, and you could see significant savings that will help to release cash into your business every month.
4. Early payment discounts
This works both ways – for you and your suppliers. If your suppliers offer early payment discounts, take advantage of them if you can, so that you benefit by keeping cash in the bank. And offering early payment discounts to your customers means you might get paid faster, which will help the cash flow too. Add to your better cashflow management by considering using a small business bookkeeping service. This will help to keep on top of your regular accounts, so you always have a clear picture of the financial state of your business.
5. Stock management
If you sell products that you hold in stock, do an inventory check. If you’re holding too much stock, that’s cash down the drain – first in buying too much and then in storage costs. Trim your inventory and hold less stock to help reduce the amount you’re paying out.
6. Increase your prices
This might be controversial, and many small businesses find it hard to implement price increases, but it’s an obvious way to get cash into your business. Done properly, you can put your prices up without losing business and, in fact, it’s a good way to show that you are serious about your business.
7. Chase your debts
All small businesses suffer from unpaid invoices. It’s annoying and it can have a serious impact on your cash flow. Either you or a third party should chase invoices as soon as they are overdue, and add late payment fees if applicable. The hotter you are on chasing, the more likely your customers are to pay you quickly. To help with this, you could use outsourced admin services for small businesses owners to add authority and to reduce the amount of time you spend chasing invoices.
8. Diversify your customers
If your business allows it, try to spread your customers over smaller, regular purchases, medium less frequent purchases and occasional big buys. This works for both products and services, and includes strategies like cross-selling and upselling, and putting service customers on retainer. That way, you have a spread of income coming in and you’re not just relying on one type of income stream.
9. Travel and expenses
This is a key area for cost-cutting. Reducing the number of meetings you travel to will reduce your driving, train or flight expenses, and most meetings can be conducted just as well on virtual platforms like Skype, Zoom and MS Teams. You could also reduce expenses by using virtual admin services – they can search for the cheapest tickets, accommodation and more to help you keep your costs down.
So, it’s easier implement cash controls for small business management than you think. Controlling the cash you spend and the cash coming in will help you to run a more efficient business. And getting help in to cover some of your day-to-day tasks can increase that efficiency further. The cost of a virtual assistant is easily outweighed by the amount you could save.
If you’re short on time and need help, feel free to call us on 0800 994 9016 or use our contact form in the menu above.