How Managing Your Cash Flow Can Make You (and Your Business) A Success

8th February 2018.


There’s a reason why cash flow is called the lifeblood of a business.

It keeps the cogs turning, the lights on and the bums in seats.

Here at the Credit Protection Association, we have written many blogs on what could happen to your business if you don’t improve your cash flow, from bad debt and insolvencies, to a considerable amount of paper work.

This time we are trying something different.

This time, we are going to show what could happen if you do come to CPA for financial advice, we do chase those late payers away, and your business is suddenly sprung open for…well business.

Enter prompt delivery vans, happy customers, holidays in the Caribbean, and…

Wait. Hold it. Reverse.

First, let’s quickly discuss how you get there.

Here are just a few easy steps on how to free up your cash flow:

  1. Clear out any bad debt that weighs down your cash flow- CPA’s debt recovery services will happily help you out with that!
  2. Ensure your payment terms clearly state your deadlines for payment, and strict penalties if accounts are overdue.
  3. Ensure your customers have filled out both a credit application form and a credit report- both of which you can get through CPA (Our StatusReportLink is incredibly thorough!).
  4. Monitor your customers regularly through our credit reporting software, to ensure their credit score remains positive, and their directors aren’t getting up to anything they shouldn’t.
  5. Also monitor your own suppliers, ensuring that they are behaving and that their role in the supply chain is not disrupted.
  6. Finally, keep communication open with your customer. Ask them frequent questions about their business and give them plenty of opportunities to admit to any problems with payment.

Now let’s talk about what happens next.

Once your business is thriving, and all your customers are behaving, it’s normal to start thinking of ways to expand your business.

Perhaps you would like to open more stores? Increase your workforce? Increase your sales? Renovate your office?

All good ideas, and all completely attainable.

Expanding your business

For months you’ve sat down in the same office, used the same computer and answered the same phone.

You can’t afford to upgrade your systems, and while the noisy building site next door is distracting, you can’t afford to move offices either.

That is, until now!

You have come to CPA, we have freed up your cash flow, and those late payers have finally coughed up.

Now you can now start thinking about your business.

More importantly,  how to make your business bigger, better and more intimidating to competitors.

Renovation

Renovations can mean anything from adding a potted plant to the break room, to transforming your office into something completely new.

Many businesses are on a mission to reduce their carbon footprint. That can be achieved by introducing eco-friendly toilet paper into the office bathrooms, using energy-efficient light bulbs, or more dramatic additions like double pane windows or automatic taps in the bathroom.

These little details will ease the conscience of you and your employees, as well as impress your clients when they pop to the loo.

Of course, the renovations do not have to be conscience-driven and can be simply driven by colour and design. Adding a bit of colour or installing a fancy coffee machine in the kitchen, can make all the difference to your business, and most importantly, to your employees.

Productivity within a damp, grey and unwelcoming office can be understandably unimpressive, so a touch of colour should enhance the enthusiasm of your workforce immediately.

Why not add a few comfy chairs or bean bags to the break room to encourage your employees to rest during their lunch break? This should prepare them for a more productive afternoon!

You could even go one step further and move to a new street altogether. Contact estate agents, organise moving vans and soon the only noise you will hear will be the noise of your own builders!

Simply put, a new office space attracts more people to it. When your prospective employees and clients see your office for the first time they should be impressed, and immediately be inclined to stay.

Advertising

The most sensible thing to do with extra cash flow is to put it back into your business.

And the easiest way to do that is to increase your sales.

This can be achieved by building a larger workforce, or by embracing a new sales platform.

Recent statistics have reported that 65 million businesses in the UK have a Facebook business page. Furthermore, 44 percent of local businesses have said that they depend on social media to generate brand awareness, and 41 percent depend on it to drive revenue.

Social media isn’t a fun place anymore.

The platform has become serious and is now utilised by businesses to draw attention.

Nevertheless, there is still a digital deficiency amongst small businesses, and many are still reluctant to embrace new technologies, including social media.

According to an SME Growth Tracker Survey by Capital Economics back in December, only about 64 percent of SMEs currently have an online presence.

This is expected to rise in 2018, which will help small businesses, in particular, advertise their goods and services to new customers.

Recruitment

Sales cannot be accomplished without the right staff, and now you have the money, why not look for more?

Building a larger workforce can intimidate your competitors, impress your customers, and in turn, strengthen your brand.

Social media can help with this too, with many job-seekers looking to LinkedIn for interviews and job advertisements.

Buying advertising on LinkedIn can be a quick and easy way to get customers.

Other job sites such as Reed and Indeed also offer premium deals for recruiters and can quickly garner interest.

Invest in new technologies

Despite its connotations, new technology doesn’t mean Artificial Intelligence.

Embracing new tech can be anything from upgrading to the newest MacBook or replacing your secretary’s telephone, to replacing your whole workforce with robots.

Upgrading to new tech can be a clear way to overtake your competitors. If your technology is behind everyone else, you risk not being able to retrieve certain email attachments and risk your company appearing outdated or old-fashioned.

The best way to use technology is to do so in a way that eases your work life, as well as the lives of your customers.

This can be through an automated sales system, online chat, or simply a digital filing system to quicken customer orders.

Some customers will abandon their shopping baskets if Apple Pay or QuickCheck is not available, so you have to be willing to embrace the digital customer.

Offering more products and services

It may sound simple, but one of the fastest ways to grow your business is through your customers.

The tricky bit is knowing which services or products your customers want.

An easy way of getting around this is to conduct market research and ask the customer what they want!

Utilise your social sites to advertise your market research and to gather participants.

This will not only allow you to provide more for the customer, but it should also increase awareness of your company and create more customers in the process!

Expanding Security

Keeping your business safe and secure is easily taken for granted.

If your WiFi and computers are password protected, and there are security locks on all the buildings, it’s easy to assume you’re safe.

Unfortunately, it is not always the case, and your business can be put in danger as a result.

As technological advancements continue, it has become too easy for fraudsters and burglars to get what they want.

Your customers and employees’ details are particularly attractive, as well as the physical value of your laptops, computers, and photocopiers.

There are simple ways to protect your business, from installing firewalls on all your computers to ward off evil swindlers, to installing more intensive security cameras and locks around your office buildings.

It’s no use putting all your time, effort and money into your business only to have it taken from you by some 21st-century artful dodger.

So be prepared, and take the necessary precautions.

Save!

All of these options look tempting, and you’re probably already envisioning how they’re going to make a big difference to your business,

Nevertheless, CPA must discourage you from taking financial freedom too lightly.

If you take a look at your business and you see no glaring holes in security or outdated technology, then it may be best to leave well enough alone.

Instead, why not tuck some cash away and save it for a rainy day.

Building your business a nest egg will allow you to prepare for the very worst-case scenarios.

Since Carillion collapsed these scenarios have got more severe, ranging from your whole supply chain going out of business, to your secretary calling in sick and leaving you to file everything yourself.

Anything could happen, so it’s wise to have some financial cushion to fall back on to allow yourself room for manoeuvre.

That nice office across the road might be up for sale, but if another Carillion strikes the supply chain… you want to be prepared.

Honourable mentions

 

A holiday in Barbados

It’s good to relieve some stress sometimes, particularly with a pina colada in your hand.

That new sports car

You’ve always wanted to drive to work in 0.7 minutes. And now you can!

A shopping spree..in Paris!

Who wears the same hat two days in a row? Not you, that’s for sure.

The bottom line..

Freeing up your cash flow can open up many opportunities.

Whether it’s buying more advertising, a new office or even just buying a new pantsuit, it’s a confident step that you now have the freedom to make!

Here at CPA, we offer our members easy and efficient ways to free up their cash flow. This easiest way is through our debt recovery service, where we can track down those late payers, non-payers, and bad payers and get you back what you are owed!

You should never suffer a cash crunch in silence, or watch in horror as that debt pile gets higher and higher..

There are many ways to free up funds in your business and even more ways to spend it!

Doing so might just change your business for the better.

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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