Tip Two - Clever Cashflow Control

Giving your business space to breathe

Of course, a business can fail for all sorts of reasons. But the very heart of what happens in the end is that they simply run out of money and suffocate. We're hearing more and more stories of bigger companies withholding payments, smaller companies struggling to pay on time and credit getting harder to come by. So we thought it was a good idea to focus on some simple steps you could take to better manage your cashflow. And we also recently spoke to Alastair Mitchell, Sage UK's Finance Director, about his thoughts on 'the credit crunch'. 

Keep a daily eye
Monitor your bank account every day and reconcile it carefully. Update your rolling cash flow projection regularly and bear in mind that late payment is more widespread during tough times. 

Get invoices out faster
Quite obvious, but the sooner you bill, the sooner you can be paid. Send invoices at the same time as the goods that you are shipping or, at least on the same day. Attention to detail is key. So make sure you include the right line items, purchase order numbers and amounts. Sending invoices by email will ensure faster delivery and avoid the "we never got it" argument.

• Hot on their heels
  Start chasing invoices as soon as possible a- 30 day invoice should be chased on day 31. Or you could even send out an automated email reminder on day 25. A quick phone call can work wonders too.
• Take note
  Clear notes on each customer account will help anyone taking orders to request a deposit, ask for payment up-front or explain to the customer that they're on hold.
• Reward the speedy
  Offer a small discount to customers who pay promptly. Or negotiate a schedule of payments for larger orders. Think about taking credit card payments online, or over the phone, which may reduce your costs and give you quicker access to your money.

Just hold on
By using electronic funds transfer to make payments on the day they are due, you can keep the money 'in your pocket' for as long as possible.
Don't always focus on the lowest price when choosing suppliers. Sometimes more flexible payment terms can do more to improve your cash flow. 

Technology is making it easier to see what's flowing in and out of your business. Clever reporting tools, coupled with internet technologies such as email and online order processing can help you quickly identify and react to problems.
Have you heard about the Sage 200 Suite? It has all the elements you need to help your business work smarter, whatever the economic climate, including:  

• Sage 200 Commercials: helps you manage your entire purchase and sales order processes.
• Sage 200 BI: powerful analysis and reporting which will transform data into meaningful intelligence.

Yours positively,
Ian Dally
The Quintech Smarter Business Team