Your business would hardly survive without financial means; therefore, financial statements are very important indicators. The Business Matters website has published five tips aimed at helping control your money.
1. Set scheduling parameters
No matter the size of your business, you always need to know when you can expect money in your account and when to prepare for expenses. This gives you the opportunity to prepare for a rainy day in advance, when costs do not exceed revenues and cuts can be made in time. There are many tools which will help you easily create a simple cash flow forecast.
2. Try prepayment
Consider if prepayment from your customers (or at least from some) might be the solution to your problems with unpaid work. If the amount is too high, what about down payment? Do not fear the reaction of your customers and explain to them that it may be beneficial for both sides because they know exactly what they can expect for their money and when. It could be risky in the case of new partners but in long-term relationships it may even consolidate mutual trust.
3. Send invoices immediately
No sale is complete until you have received the agreed amount. But your customers cannot pay if they lack accurate information about the exact cost of the business deal. Therefore, no matter whether you issue the invoice before or after the provision of services or delivery of goods, do so promptly in order to avoid unnecessary delays.
4. Watch your money
You specify the terms and conditions of your business, not your partner, who buys goods or services from you. Therefore, define specific payment terms on your website and on invoices to make it clear to all concerned. Do not waste time with reminders of outstanding invoices; try instead any automated tools for managing debtors and their notification.
5. Consider when you will pay your bills
Not only do you collect money, but you also have to pay your bills. None of the above would make sense if you did not follow your own obligations. Breach of the payment terms of your supplier can easily disrupt business relations, something you surely do not want. However, beware of being too responsive to your partners and do not repay liabilities well in advance of the deadline: you could fall into insolvency with other suppliers or institutions.
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