Talking Cents
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Small business accountant in Sydney tells you cash flow is a whole of business system, not just an invoice and collect systemIn recent times the amount of articles and blogs in business circles written surrounding the topic of small business debtors and the ability to get paid on time, if printed, would probably be enough to cover the entire country in paper. I certainly know that I have covered this topic in the past and yet the issue of not being paid on time is still one of the biggest hurdles for small businesses to overcome. The cost of not getting paid on time and the resulting impact on a small businesses cash flow can be catastrophic. The costs of poor debtor management and cash flow can be measured in the following ways:
For even the smallest of businesses the costs we’ve mentioned have the ability to represent a significant and tangible amount of money. This, of course, has the potential to create an out of control spiral as the above factors then affect the next periods cash flow and so on until businesses are unable to pay their debts and eventually close. It does not need to be this way. I don’t intend on repeating the many articles on practical cash management tips, I wrote a similar article on the topic just over twelve months ago. The focus here is to emphasise the absolute must of a business to make sure every client or customer is fully aware of exactly what they are getting for their money. In doing so, you prevent angst and frustration on the other side of the fence. This frustration with receiving unexpected bills and deadlines for payments can and does lead to longer payment times. Remember, you may be invoicing business to business, but there are real people at the other end of the process and their emotions can and will affect how quickly you get paid. The key is to follow these five pointers to maximise the ability of your customers to be willing to pay you on time:
Cash flow is the lifeblood of all small business, without a steady stream of cash flowing into your bank account, you are hampering your businesses ability to not just grow, but survive. The costs and missed opportunities of absent cash are real and measurable. Take a look at our list of potential costs, if you have a large amount of interest expenses in your profit and loss, are always scratching around or calling clients at the last possible minute begging for them to pay you then it is our sincere hope that these pointers has prompted you to take a look at your business procedures from top to bottom. The way you quote, communicate, work with and follow up with your clients all has a direct impact on your bank account balance. Remember it is your money, just go about the processes in the right way and your money will be yours sooner. Based in Sydney and Melbourne, mas accountants has been around helping small businesses for over 50 years. Do not hesitate to contact us soon! |