Posts tagged ‘Difficult Times’

Everyone in business has heard the term “Cash is King” and understands the importance of cash flow, but when in the day to day ‘busy-ness’ of business it is easy to take your ‘eye off the ball’.

So in these difficult times, if you find yourself in a position where cash flow becomes a matter of urgency rather than a procedural chore, what can you do to turn things around?

Here are my top five quick fixes, each one worthy of a post of its own.

1. Debt Collection

Focusing on getting paid for what you have provided is an obvious place to start. 

Don’t allow customers to improve their cash flow at your cost and don’t get lazy when it comes to implementing rigid credit control procedures. Many ledger clerks are instructed by their managers not to issue payment until a debt has been chased both in writing and verbally, so don’t cut corners or get caught off guard. 

If you are uncomfortable with this discipline or you have accepted that this is not your skill set, outsource it.  I recommend Ken Brown from Direct Route for everything from collecting a single difficult debt to completely managing your sales ledger. 

Also, be sure to focus on servicing customers that do stick to your payment terms.  Don’t forget my previous advice about allowing “he who shouts loudest…” to distract you from those that are key to your success.

2. Improve terms and conditions of sale

Meet with each of your valued customers without delay and renegotiate terms.  By prioritising their needs and building confidence in your business relationship, agreements regarding quick payment, or even payment on delivery can be made. 

If need be, offer an early payment discount to encourage quick settlement.  Often the reduction in margin, is substantailly less than the cost of finance such as overdrafts or the deminished goodwill from not meeting debts as they fall due.

Don’t forget that it costs a lot more to attract and service new business than it does to obtain more business from your current clients.


3.  Get your bank manager onside

Having up to date management accounts, a clearly defined business plan that demonstrates that the current difficulties are short term and building an open, honest business relationship with your bank manager will no doubt create flexibility. 

Once they have built confidence in you as a business owner, they will at short notice be able to offer solutions and support.  Involve your accountant in this process.

4.  Manage suppliers

This aspect is often not given enough attention.  In the same way that you manage customers, prioritise, negotiate and treat your suppliers with respect. 

Being honest with them and honouring any payment arrangements you have agreed with them will keep your integrity and prevent suppliers from ‘digging their heels in’.

Also, if you hold stock, review your processes and speak to your suppliers about delivery times etcetera, they may be able to help you to manage a ‘just in time’ system by offering you a priority service. 

5.  Increase profitability

Certainly not the easiest or quickest approach and one where you might want to seek support from your accountant or a business coach.

Looking at overheads is an obvious point, but how about reviewing historic data to identify which products/services in your sales mix generate the biggest contribution and assign time and effort in pushing these.  Perhaps redirect your marketing budget and reward your team for selling these items or finding innovative ways to deliver these at lower costs.

As well as focusing on your most profitable products/services, take time to identify your most profitable clients

Budgeting can take time, but often some ‘quick wins’ can be discovered by carrying out these accounting exercises.  They can also drive long term process and cash flow improvements. 


The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

For more advice on subjects such as this, please ‘join my lists’ for a monthly business support newsletter.

HR DeptThis post has been written by a great networking colleague of mine, Sue Isaacson who runs HR Dept a successful HR consultancy and/or complete outsourced HR solution.  I hope you find it useful.

 

Crashing into Winter

Autumn

Autumn

Season of mist and mellow fruitfulness is the poetic description for Autumn however, with the clocks going back, the dark nights are here this is the ideal time for employers to review their driving policies. It is estimated that between 25% and 35% of all road traffic crashes involve someone who was at work at the time.

A driver’s reactions depend almost entirely on vision, and vision is severely limited at night. Twilight is one of the most difficult times to drive as our eyes are working to adapt to the growing darkness. After a long day at work tiredness is often greater, and this can make driving even more hazardous. For employers there are numerous laws that cover driving and many of these are ignored by employees once they are travelling around the country.


42-15625332According to statistics 31% of the UK’s van drivers are not wearing seatbelts, even though they have prevented an estimated 60,000 deaths and 670,000 serious injuries over the last 25 years and are considered to be one of the simplest ways of improving road safety.

Smoking in Company vehicles was prohibited in 2007, but how many times do you see drivers and passengers puffing away? There is a lot of confusion around this with employees believing it is acceptable so long as the passenger does not mind. But this will not save them from a fixed penalty fine.


j0442135Using mobile phones or programming a Sat Nav both substantially increase the risk of a driver crashing. Recent research from The Transport Research Laboratory found that text messaging while driving is more dangerous than drinking and driving. Drivers using mobile phones, whether hand-held or hands-free, are four times more likely to have an accident. In addition to this, if the Company is ringing the employee on their mobile phone at the time of an accident there is a risk that they could face prosecution for corporate manslaughter.

 

As adults working together in a busy commercial environment, it is easy to shun responsibilty for our staff and colleagues.  After all, these ‘problems’ happen to other people don’t they?

Sue points out it is the human tragedy behind accidents that make it imperative for sensible and practical driving policies to be in place.   These policies needn’t be complex or burdensome, but they do need to exist to protect both the business and the people involved in them.

Sue Isaacson is a human resources professional providing advice on HR and employment issues for The HR Dept. She is a friendly, approachable professional and I would highly recommend her easy-to-read monthly emailed newsletter. 

 www.hrdept.co.uk/cambridge.htm     Tel: 0845 078 8454 or email: sue.isaacson@hrdept.co.uk