Spring Business Tips
Our last edition came at the end of FY14, a period when business are busy getting their financials in order. Now we can look forward to FY15 with a clear head and the opportunity to seize the most out of all four quarters. Spring is an especially busy season for many businesses as they start to gear up for the Christmas sales period. To ensure your Christmas sales bear the fruit that they should:
Get on top of your cashflow
- Make sure you receive written orders from your customers and Proof of Delivery. These avoid misunderstandings are important pieces of evidence if payment isn’t easily forthcoming.
- Don’t wait until an invoice is overdue before you contact Accounts Payable. In fact, call before it is due to make sure there are no reasons that it won’t be paid on the due date.
- Undertake your collection calls from largest customer down. In many ledgers the pareto principle applies - your top 20% of your customers numbers will make up 80% of your $ owed. By using this collection method your efforts will be more productive.
- If a customer offers to pay a round sum amount, request that they pay a similar value that is made up of specific invoices – this will avoid potentially painful “preferential payment” claims if your customer fails.
Cull the time wasters
Too often we service businesses that purchase quantities that just aren’t worth the effort. Have a think about the real cost to service a customer; not just the delivery cost but your time as well - cull those time wasters.
Clear your old stock
Right now many businesses will have obsolete stock, particularly those in seasonal businesses. Review your old stock and get rid of the old, slow-moving items. Better the cash be in your business than to continue to bear the holding cost.
Annual leave hoarders
In any business you will have annual leave hoarders. They are the people that think they are too valuable to be away from the business. The problem is that your P & L is impacted by both wages for the whole year plus an annual leave accrual, not to mention the liability on your balance sheet. Look at those with more than 18 months leave accrued and enforce some Christmas holidays
Plan time off at Christmas
Christmas is the best time of year to have some quality time off with family. Relax let your hair down and enjoy the fruits of your hard work.
Start to follow these tips now and you’ll be set for smooth sailing throughout 2015. Small changes can have a big impact, so get tinkering and see how you can unlock your full business potential.
