The global pandemic has wreaked havoc not only on our everyday lives, but on the lives of our businesses as well.
Can my business survive the pandemic? Do I need a shift in strategy to navigate this unpredictable financial climate? These questions are at the forefront of many business owners’ minds, and not only those running enormous firms, but the small businesses who are the engine that moves the U.K. forward economically.
Given our current economic climate, navigating the successful growth and stability of your business does not have to be such an onerous task.
In this post, BrooksCity Chartered Accountants offer 3 proven strategies to make your business more financially stable this year.
Choose the right accounting software for your business
If your bookkeeping and accounting is done on pen and paper or through excel spreadsheets, it’s time to upgrade.
Small businesses have as much to gain from switching to a morestreamlined and modern form of accounting and record keeping as larger firms. In 2021 the need to be able to manage and share your accounting data and bookkeeping records from anywhere has never been more important with so many businesses relying on staff working remotely.
It’s very important not only now, but in the future that businesses don’t tie down their ability to keep the books by having all the information on workstations at the office. This is where cloud based accounting applications can be essential.
An in depth checkup on your business and it’s accounting needs is a solid decision in uncertain times. A vital part of this process is evaluating the best options for accounting software and the benefits it will have on your business in the short term, as well as planning ahead in a recovering economy during a global pandemic.
Monitor your cash flow closely
How well do you track the flow of money coming in and out of your business?
You may know your profit margins and losses like the back of your hand, but understanding how much money is flowing into your business and how much is going right back out is just as important.
Negative cash flow can cause a serious bottleneck in growing your business, investing in the future or planning intelligently.
Top tech companies are turning to cash flow management as one of their most important mitigating factors to combat the unpredictable economy caused by the global pandemic.
This is great for companies like Apple or Alphabet (Google) but why should smaller businesses use cash flow management in their planning and strategy?
Small firms and big corporations alike have common concerns. Short term debt being one of them. Healthy cash flow means the ability to repay debt on time and maintain valuable business relationships with both financial institutions, suppliers and partners.
Having steady cash flow, and monitoring it closely also means you have access to money when you need it most, to cover an unforeseen expense, or seize on an opportunity for growth that is time sensitive and even navigate downturns.
Tackle late payments the right way
Small businesses account for the vast majority of the business population in the U.K. A major problem faced by smaller firms is the matter of late payments and how to manage them proactively.
The global pandemic has certainly exacerbated payment problems, but late payments aren’t unique to the current economic climate and are a persistent issue that can harm a small business both in the short term and in long term strategizing.
Some smart strategies can be used to mitigate the negative effects of late payments, such as using online invoicing, allowing clients to make payment arrangements and using a rewards system for customers who can pay you early.
Preparing your client base from the start of any arrangement is your best tool to avoid problems caused by late payments, and working closely with a qualified accountant can be a great help in this aspect of payment and cash flow management.