Top Reasons For a Financial Spring Clean

14th March 2018.

With Spring literally just around the corner, there’s never a better time to take a keen look at your finances.

Is your credit score looking good?
Are your customers behaving?
Are your employees doing a good job?

Those late payers have been cluttering up your cash flow long enough, and it’s finally time to organise your cash flow and dust off those negotiation skills.

Of course, it’s not just Spring that should warrant a financial refresh, and you should take a keen look at your finances periodically throughout the year.

Credit check your company

This is important for every business, regardless of sector or financial standing. Whether you believe you’re doing well is irrelevant, you need to check.

Credit scores are used by lenders and suppliers to determine whether your business can be trusted to pay their invoices and therefore determine whether a business or financial arrangement can be reached. It’s therefore important you pay close attention to your score, as a jolt in the wrong direction can severely damage your business’ prospects.

Here at the Credit Protection Association, we offer our members status reports on their own business, which are not only extremely easy to understand but also alert them to any problems early before any damage is done.

How about your suppliers?

Not only do you need to double and triple check how high your score may be, but also the score of your customers, your suppliers and all the way down the supply chain.

Since the collapse of Carillion, it has become clear how vulnerable the supply chain is. Unless you take notice of every aspect of your business, from the supplier to the customer and back again, everything could come tumbling down.

Our CPA status reports can be used for yourself and for all those you do business with.

Keep your customers paying on time

With retailers and construction giants dropping like flies it’s become increasingly important to check, double check, and triple check that your customers are paying on time and will continue to do so.

The collapse of Carillion highlighted how size doesn’t equate a good customer, with many large businesses admitting to using their position to bully their smaller customers.

The presumption that ‘blue chip’ companies are safe from collapse has been disproven, and your big customers are just as likely to fall behind on payments as your smaller customers.

Therefore, take the necessary precautions: these range from credit checks, sending invoices with all the information correct and accurate, outlined clear and strict payment terms with penalties for late payment, and lastly, an avoidance of manual processes within the credit control procedure, as these will most likely slow the whole process down.

Keep your business out of the red and into the green

Spring is a great time for growth. So as the daffodils in your garden bloom, so should your business.

There is never a better time to check you have a profitable business and not balanced on the insolvency brink. You should check your cash flow every week, keeping an eye on slow payers and plan ahead to see how you will cover potential damages or economic downturns.

Taking a good look at your finances will highlight any anomalies that you previously missed, allowing you to investigate any unpaid invoices and combat any bad debt, that is weighing on your cash flow.

You should also consider asking for external help. Here at the Credit Protection Association, we can offer advice and assistance on getting bad debts recovered and also provide credit checks to prevent further bad treatment.

Make room for expansion

One of the major motivations behind spring cleaning your finances will be to try something new. This could be through renovating your offices, installing new technology, or even just hiring more employees. Either way, this venture should improve your business and its profitability.

Technology has become an important aspect of growing a business. From spending cash on new telephones or automated processes, you will ease the daily grind for your employees as well as for the customer.

As technology becomes an integral part of our day-to-day lives, professional bodies will have to adapt. While older companies remain reluctant to move away from traditional concepts, this could lead many to be disadvantaged in the competitive business environment.

Setting aside a portion of your revenue for new ventures will give your business an edge, in case of any economic or political downturns.

Organise yourself better

Are you just shoving your receipts to the bottom of your briefcase? Do your customers have to wait a few minutes for you to gather your paperwork together?

Either case is unprofessional, and as a businessperson, it is essential that you always promote your brand, rather than damage it.

While you look through your financial history this spring, why not organise your paperwork. It might even be easier and more efficient to digitise your workplace. Piles of paperwork not only take longer to organise, but also infringe on the available space in your office.

Put the Spring back in your step

Spring cleaning can be good for the body and soul, and for the business.

Just as cleaning out the attic can be therapeutic, so can cleaning out your late payers, or organising your filing cabinet. Feeling comfortable with your business can not only help your business to succeed but also aid your own personal success.