Posts Tagged Leeds

Cash Flow Management – How do you manage yours?

Getting customers to pay their bills on time is one of the biggest challenges a business owner faces. According to the Department of Business Innovation and Skills, last year 4,000 businesses failed because of late payments and cash flow issues.  Analysis of invoices highlights that many are submitted late or are deficient due to having the wrong details on them, leading to the incorrect processing of the invoices.

If a customer’s payments slow down, it’s advised that you should check them out as it may be a sign that they are in trouble, therefore it would be better to stop supplying than to suffer a bad debt. On average, small  businesses  in 2012 wait two months on top of their payment terms to get paid.

However there are a few tips for trying to ensure the invoice is paid correctly and on time:

  • Send invoices ASAP – and make sure they are sent to the right person. If they need to be passed from person to person, department to department, this will slow the process immensely.
  • Explain every single charge clearly and concisely.
  • Make deadlines clear from the very beginning – especially from when they sign the original contract.
  • More invoices to clients for smaller amounts.
  • Send a hand-written thank you note to the credit controller on a regular basis – get to know them, so that you are pushed to the top of the pile.
  • Find the best date to get the invoice to the customer so it doesn’t go past their cut-off date and another month is wasted.
  • Learn about customers’ internal accounts processes and work with them. Get your best customer to pay quickly.
  • Be tough and don’t accept excuses
  • Threaten to use winding up orders to excerpt more pressure on debtors as a last resort.

Aside from these tips, there are other methods that could potentially be utilised to secure payment on-time.

  • Take upfront deposits before you even start working. Since the start of the recession this is more acceptable.
  • Utilise discounts or loyalty rates to get paid quicker.
  • Only pay on set days in the month to hold onto your cash longer.
  • Use suppliers as a line of credit, instead of banks.
  • Swap excess funds in your operating account into an interest bearing account. Ask your bank to automatically sweep excess funds.

Invoice Finance– Is it only for struggling businesses?

That used to be the case, but now it is a good  form of finance. Invoice Finance bridges the gap between the point at which you make a sale, and the time payment is received. An  arranged percentage is released to you, which is good if the customer has long payment terms .

Choose either Factoring or Invoice Discounting- Either the finance company chase your customer or you chase your customer.

Don’t forget, under the law you can claim interest at 8% over the Bank of England base rate, and compensation of between £40 to £100 on each overdue invoice under the Late Payment of Commercial Debts (Interest) Act 1998. This does not have to be referred to in your Terms and Conditions, and can be applied to goods exported to the EU.

To summarise, getting paid on-time to keep cash flow projections on track is hard. Use your educated guesses to project cashflow which is based on a balance between understanding your customers payment habits and your realistic management of expenditure.

All points in the article above were taken from conversations at The Business Exposure Group where business owners and Directors are invited to take part in round-table discussions at venues across the North of England.

If you are a business owner or Director and would like to be considered for an invitation, please contact Philip Drazen directly at philipdrazen@bxgroup.co.uk

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SME sector says Business is looking brighter

SME sector sees growth potential in UK

Although the economic crisis continues to place severe pressure on small and medium-sized businesses and make trading conditions difficult, the outlook is encouraging.

SMEs account for the majority of all enterprise in the UK and feedback indicates many are placing themselves in the best possible position to survive and prosper by running a tighter ship, streamlining services and becoming more customer-focused as they work hard to retain existing clients.

A recent survey indicated four fifths of SMEs believe that 2012 will be better than 2011.

Consumers still value the individual care and attention to detail a small business can offer and those SMEs which invest time in nurturing the relationship they share with their customers will encourage loyalty and satisfaction.

Advances in social media and digital marketing have widened the opportunities for businesses to communicate with their customers and develop stronger relationships. Social media, in particular, gives businesses a direct route to their customers and provides a valuable insight into their habits and preferences. It’s one of the most cost-effective options for building brand awareness and the information collected can be used to modify sales and marketing projects to be more personal to specific customers.

Evidence shows more and more SMEs are embracing social media and using it to manage their reputation and the relationships they have with their customers. They are also measuring their performance by actively seeking feedback from customers and welcoming complaints so they can improve service standards.

Many small or medium sized businesses are also reporting good profits despite the economic downturn and are seeing a steady stream of work. Although the financial climate has led to cost-cutting and staff losses, the result has been a more streamlined operation which is both competitive and growth-orientated.

However, despite the growing optimism, the availability of finance continues to be an on-going concern among SMEs and a barrier to growth. Banks are now much more likely to reject loan applications and overdraft requests as they did before the financial crisis. Many businesses are reluctant to even attempt to apply for finance because of the perception they would be unsuccessful.

Taken from a discussion at Business Exposure Group

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Manchester – Business Discussion Forum Event

The next meeting of the Manchester 1 Premier Business Forum is on Monday 6 June at 1.30 – 5.00pm – please ask us for details.

Please let us know if you would like to attend any of our groups in Leeds, Sheffield, Wetherby, Manchester or Bradford over the coming weeks..

Last month’s meeting was excellent with some good quality discussion and suggestions from the guests that attended.

With 9 groups now operating, the main issues across several discussion groups
included: –

–          Increasing customer engagement, when your product range is limited.
–          Outsourcing to increase competitiveness.  The advantages and pitfalls.
–          How to build a pipeline of business based on listening to the issues your customers
are facing.
–          How to motivate senior staff when there has been no salary increase or bonus for 2
years.
–          The value of ‘competitor knowledge’ when building a robust business
–          Do I grow or do I stick?  – The fear factor.
–          Should the business employ more sales or more support staff, as a way of
increasing the size of the business?

The high value of the group advice was commented on by the majority of the members.

Please let us know by return if you would like us to reserve a place for you round the
table at our next meeting on the afternoon of 6 June 2011.

The numbers are limited to 15 and the groups are now getting full.

If you would like to attend, please contact Philip Drazen by email at: philipdrazen@bxgroup.co.uk

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Discussion summary from our March events

          Selecting personnel who will make you a profit and not just provide a service.
          Techniques to close a sales order after finding the buyers ‘pain’ and real reason for purchase.
          Creating a business organisation that knows how to sell.
          Our changing approach to marketing and communication in the current climate (spend and tactics).
          How social media can be part of your business and customer development.
          Group feedback with regard to this years salary reviews.
          Systemizing your business to make it scaleable and attractive to a purchaser.

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Discussion summary from our February events

This months meetings went really well.   The main issues across several discussion groups included:-

How to be good at time management. – The need to prioritise important tasks without emails taking you off track.
How to incentivise senior employees without giving them a share of your business.  – The advantages of an EMI scheme as opposed to a Long Term Incentive plan.
How and when to begin finding a replacement business partner in readiness for their retirement.
How to get bigger customers.
How to deal with an important member of staff who continually plays the system.
The merits of a full time financial controller, or an outsourced function, or a part time senior strategic financial director. – The pros and cons.

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Discussion summary from our January events

We now have 9 Business Exposure Group forums in Leeds, Wetherby, Manchester, Sheffield and Bradford.

This month’s January meeting went really well and the issues across several discussion groups included:-

  • How to make your business offering in 2011 stand out.
  • What techniques are we using to get past the” gatekeeper “and arrange meetings with new prospects.
  • How to offer discounts running alongside normal trading terms, without down- valuing your core business.
  • How to make your staff feel passionate about your customer service.
  • The value/cost of a pay per click campaign.
  • Business opportunities arising because of the recession and how to finance them.

The high value of the group advice was commented on by many of the members.

The dynamic within each of the groups is maturing well.

The next meeting of the Manchester Premier Business Forum will be on Tuesday 1st March at 1.30pm, at the Forsyth Centre, The Triangle. Exchange Square. Manchester.

Please let us know if you may be interested in being invited to one of our groups by emailing philipdrazen@bxgroup.co.uk

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