There is no point having a client who either doesn’t make you money or pays you too slowly. This advice applies across your entire client base, not just to the next new business deal.
Business relationships are dynamic and changes can easily affect profitability without you realising. Three simple steps to keep on top of profitability are:
These steps assume that you have a management accounting system that consistently measures client profitability and if you haven’t then you need to improve this area of your business as soon as you can. You should also consider the appointing someone to be the Gross Profit Officer.
Finally, take what you learn from this exercise and factor it in to your negotiations for new business.
We have a number of blogs about credit management and the simple fact of commercial life is that businesses go bust through a lack of cash – even if they are profitable.
So put credit management and control at the very heart of your business and make sure you get paid in good time.
Credit management is a wide topic but a starting point would be these three ideas:
Business conditions remain challenging for all of us, but you can reduce some of the risks and make more time to concentrate on growth, if you can successfully improve client profitability and reduce the time it takes to get paid.
We regularly help businesses with profitability and credit management – resulting in more money in their bank accounts.
Can we help you? Please give me a call on 020 7125 0270.
Michael @diaryofanomb
We don’t believe in forms, we believe in talking to people, finding out your needs and tailor-making a solution just for you.
Give us a ring on 020 7125 0270 or email us at info@bluedotconsulting.co.uk
“Michael and the Blue Dot team have been an essential part of our journey from startup through to being an established company, and we look forward to continuing working together long into the future. They have always been on hand to offer support and sound advice whenever it is needed.”
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Michael was fantastic. He quizzed me on how my business worked financially and was super patient with me. Explaining everything in a non-accountancy manner. He then showed me how to utilise all the less obvious tools in the program, which he continues to do, so that I can see immediately what monies held belonged to my company and what is held for clients. I now do my own VAT returns and payroll because of his help and continued support.”
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“Blue Dot have been our accountants and bookkeepers since the very beginning of our business, and have been nothing short of outstanding throughout.”
