Tag: credit control

Winter is coming – be prepared!

The economic headwinds are blowing stronger and there’s plenty you can do to batten down the hatches and prepare your business for a recession.

There may be trouble ahead.

But forewarned is forearmed and there is plenty you can do to batten down the hatches and prepare your business for a recession.

And be ready to take advantage of the better days that will follow.

Know your numbers

Your bookkeeping must be up to date and stay that way so you know exactly where you are and you minimise the surprises that will surely come your way.

Make sure you understand what the numbers are telling you and take action based on this information.

Look ahead – at profit and cashflow

There are two forecasts you need:

  • Profit forecast
  • Cashflow forecast

In your profit forecast be realistic about future sales and be prepared that you’ll lose some customers and that some contracts and projects may be postponed or cancelled – sometimes at the last minute.

On the cost side of your profit forecast identify which costs you can reduce or cut completely and get on with it. People and premises are usually the areas that will yield the biggest savings.

It’s often best to cut hard and cut early.

As for cashflow – go backwards before you go forwards. Get a simple cashflow model working by modelling the last six months of actual cashflows and then, using your profit forecast and your up to date bookkeeping information, model the next six months or so.

In both forecasts – be realistic and don’t forecast too far into the future.

And keep updating the forecasts because circumstances will change.

Credit control is paramount

If you’re not on top of credit control then get on top of credit control now, and stay there. Make sure you have an aged debtors list to review at least once a week.

If you can, set up your customers to pay by direct debit. Be wary of any that won’t sign up as this could be a sign that they are going to be slow and payers.

Difficult customers? You might be better off without them.

Get on the phone and, if you have to, go out and visit customers that owe you money.

Don’t rely on automated messages and simply sending statements from your software. By all means set them up so there is a steady trickle of credit control reminders going out to customers but nothing beats talking to customers if you want to get paid.

Cut costs and do more with less

Take a thorough look at workflows and ask if they can be made more efficient and, indeed, if they need to be done at all. Can you redesign workflows and processes to make them simpler and cheaper?

Counter-intuitively, is now the time to invest in new software, automation and other capital items to improve productivity?

Look closely at costs of sales and margins. If sales are likely to reduce in the coming months then are there deals to be done with key suppliers, who want to keep your business as a customer, which will lower your costs of sale, meaning you make more money from each sale you do make?

Finally, run through all of the business overheads and see which can be cut.

Cost cutting doesn’t need to be “all or nothing”. It may be that all colleagues share the pain with a pay cut across the board rather than some people lose their jobs but not others.

Build a cash reserve

It shouldn’t take the threat of a recession to prompt any business to build up a cash reserve, there should already be funds in place. But, in the real world, that may not be the case.

Charities and other not-for-profit organisations are compelled to build up reserves that amount to, say, three or six months’ of operating costs. If charities can do it, why not you?

Building up a cash reserve now means you have to work harder on your cashflow and in practical terms, if you don’t already operate two bank accounts, then open a second account now.

=> Why two bank accounts are better than one

Marketing opportunities

Go right back to basics – the four “P”s of marketing:

  • Product – can you diversify or discontinue less-profitable products or services?
  • Price – don’t lose sight of the value you add as prices come under pressure. Protect your margin!
  • Promotion – as market conditions change for everyone then communications must adapt
  • Place – do you need to be everywhere? Perhaps regroup and simplify.

It’s important to be positive with marketing and recognise there will be opportunities in your market. Simply put – not everyone will get through to the other side.

Be different and be seen to be different. Innovate with products and services and make sure you communicate effectively to customers and prospects.

And if opportunities arise then try to capture market share.

Know who your friends are – customers, suppliers and colleagues

In hard times it pays to have strong relationships with customers, suppliers, colleagues and other stakeholders.

Provide great service and clear communications and perhaps now would be a good time to set up a customer loyalty scheme that rewards repeat business.

Continue to build close relationships with customers (not forgetting to jettison any that are not profitable) and, provided your cashflow supports it, pay everyone consistently on time.

In fact, if you can consistently pay your suppliers on time then use this as a negotiating tool to agree lower prices.

There seems no doubt that the economic headwinds are blowing stronger and running your business will become more difficult.

Be prepared. Take action sooner rather than later and come through it stronger than before!

Michael

Related links:

Blue Dot Consulting Limited

Get paid quicker – 5 tips to improve your sales invoices

I think sending a URL link rather than a PDF is nuts! Why make it more difficult for your customer to deal with your invoice?

To get paid quicker, you have to get your invoices out to customers in good time and in good shape otherwise you risk ongoing cashflow difficulties that could hurt your business.

We recently saw a business where, because of system changes, one month’s invoices to clients went out very late and they almost failed to be able to pay their staff at the end of the next month.

It seems that however well-organised you are with invoicing, even a small glitch can have a disproportionate effect on cashflow.

So, if sales invoicing is so important, how do you make sure you get paid quicker?

1. Get the basics right

Make sure you have an agreed contract or agreement with your customers and that it included terms of payment and, perhaps, a payment schedule if it is for a distinct project.

Are your invoices:

  • professional-looking, accurate (no surprises for the customer, errors can delay payment)
  • sent to the right person
  • correct for details such as Purchase Order number if required
  • sent out in good time.

If you know that your client requires two signatories on an invoice greater than £50,000 then why not send them two for £25,000?

Get the basics right first time, every time.

2. How to create invoices to get paid quicker

There are four common ways for a business to create sales invoices:

  • Use your accounting software. The creation of the invoice does the accounting at the same time, so there’s no duplication of effort.
  • Use a CRM system – in which case make sure you have software to send the invoices from your CRM system to your accounting software
  • Use a sales invoicing app
  • Word, Excel or similar. A spreadsheet is better because it will add things up and calculate VAT properly. However you do it, convert them to PDF before sending them so they can’t be changed.

However you create your invoices, make sure the basics are right.

3. How to send invoices

Invoices get sent electronically, no ifs, no buts.

There are two alternatives, one good, one bad.

The good alternative is to send your invoices as PDF attachments to emails, making sure your email goes to all parties that need to see it. Taking away yet another excuse not to be paid!

The bad alternative, but championed by some accounting software providers, is to send an email containing a URL link to your customer.

I think this is nuts! Why make it more difficult for your customer to deal with your invoice?

Sending the URL is simply creating a reason for your invoice not to be paid as it makes your customer have to do a bit more work which they might conveniently forget to do.

4. Make it easy to get paid quicker

Try to use a direct debit service such as GoCardless.

This will take away almost all of the pain of getting paid.

Sign up all new clients to pay by direct debit and be very wary of any prospect that won’t do so.

If direct debit is not an option then your invoices should contain the details of how you want to be paid.

Direct bank transfer, such as BACS, is best and therefore you MUST include your bank sort code and account number on the invoice.

If your client is overseas, further details such as your IBAN will be required and part of getting the basics right will have been to use the correct currency for the invoice in the first place.

Every sales invoice is part of your credit control process and it must help, not hinder being paid.

5. Systemise your sales invoicing process

Like many business processes, sales invoicing should be turned into a documented system that can be run in the same way every time and produce the same outputs. Make sure more than one person knows how to run the system so that holidays and staff changes don’t mean invoices are not produced.

Sales invoicing becomes more efficient, less prone to error and clients come to expect your invoices to arrive at the same time and in the same way each month, which helps you to get paid.

Where you send recurring invoices of the same amount to the same clients each month, use your accounting software to set up and email recurring transactions (e.g. memorised transactions in QuickBooks) so the job is done for you and not overlooked.

Also, your accounting software should be able to send automated chasing emails to customers that owe you money – but get on the phone as soon as an invoice is late!

Easy!

There’s no reason to be poor at sales invoicing and the positive impact on cashflow means that you have one less thing to worry about.

Michael

Related links:

How to improve cashflow and make more money

I stopped doing my books when I realised I was making them worse!

Profitability and cashflowhttps://bluedotconsulting.co.uk/service/profitability-and-cashflow/

How to improve cashflow and make more money

To keep cashflow grounded in reality, go backwards for six months to see what the actual cashflows have been before you go forwards and model the future.

Knowing how to improve cashflow is always important and as we continue to live and to trade in uncertain times, cashflow management is even more important.

We also face a very difficult banking climate which puts a huge premium on self-reliance, being the master of your own cashflow destiny and not having to look to your bank for funding.

So here are five ways to improve cashflow and make more money.

1. Cashflow model

Build a simple cashflow model in a spreadsheet, which might look a little like this:

Example of a cashflow model

Stay grounded in reality, go backwards for six months to see what the actual cashflows have been before you go forwards and model the future.

Update the model each month with the actual cashflows for last month and any modifications to what you think the next few months will bring.

Use the cashflow model to identify changes you can make across your business that will bring more money in.

If you are a borrower, share your cashflow model with your business bank manager early on so they can see the steps you are taking to manage cashflow and you can identify future pinch points and manage them together.

2. Credit management and control

If you offer credit to customers can you use a direct debit service such as GoCardless?

Credit management starts with trying not to market to customers who are bad credit risks or slow payers and ends with consistently getting paid in good time.

You have to pay attention to credit control because otherwise cashflow suffers, costs rise, stress increases and your business might fail.

We have a number of blogs on credit management that you might find useful.

3. Improve margins

The more profit you make from each sale, the more money you make. So, review your prices and your costs of sale to see where improvements can be made. Be competitive, but that is not necessarily the same as keeping prices low.

If every £100 of sales you make can generate an extra £5, how much more money will come into your business?

See our blog on profitable pricing.

4. Reduce overheads

How to improve cashflow – spend less money!

Every pound of overhead is a pound of cash that goes out of the door.

Review your overheads to make sure you are not spending more than necessary and also to ensure you are getting value for money spent.

5. Phase payments to creditors

Some payments, particularly quarterly ones like VAT, rent and lease payments, can fall to be paid at the same time, creating a difficult pinch point every three months.

Can you change the months in which these payments are made so they are phased more smoothly and put less pressure on your cashflow?

For example, you can you ask to change your VAT quarter to move the VAT payment to another monthly cycle.

By staying on top of your cashflow, you will be able to grow your businesses without relying on or borrowing as much money from your bank.

You earn more or pay less interest, you can re-invest the cash generated in growth or by rewarding key staff and you have more time to concentrate on running your business – doing what you should be doing!

Michael

Related links:

Cashflow

Why two bank accounts are better than one

Get paid quicker – 5 ways to avoid bad credit risks

Improve cashflow – our’s is a mess and I’m running around like a headless chicken

Poor cashflow is a symptom and a problem. We take a look at practical ways to improve your cashflow.

“I need to improve cashflow” – it’s the lifeblood of any business and most people running their own business will have found themselves thinking something like this at some stage.

What can be done?

Solutions are at hand. Take a deep breath and read on.

Cashflow model

There are two types of business:

  1. Those that don’t need a cashflow model
  2. All the rest

Most businesses are type 2 – they need a cashflow model.

These days there are several apps that will link to cloud accounting systems and produce cashflow forecasts.

Personally, I’d start off in Excel and keep it simple. Here’s an example of what your model might look like –

Example of a cashflow model

Go backwards to model actual cashflows before you forecast forward so your forecasts are anchored to reality. And keep your cashflow model up to date.

Other cashflow blogs:

Don’t bank on your bank for cashflow

A gory cashflow model is a useful cashflow model

Credit control

Get on top of credit control NOW!

Call the people who owe you larger sums of money and stop working with them until they pay.

Again, there are apps that will link to cloud accounting systems and manage credit control. And again, I’d get my processes and workflows organised and working effectively first before delegating credit control to a computer.

That said, look at GoCardless – an app that allows you to set up direct debits with your clients. GoCardless really is a game changer.

Remember – a sale is a gift until it’s paid for.

Other credit control blogs:

Workflow

So much of cashflow management and credit control is about being organised and having efficient workflows. For example:

  • Agreeing written contracts and price proposals
  • Delivering products and services on time, to the agreed standard
  • Getting invoices out as soon as possible
  • Keeping your accounts up to date so you know who owes you money and who you owe money to
  • Having a fixed payment run each month for suppliers so they know reliably when they will be paid

Much of which comes down to having efficient, up-to-date bookkeeping.

Have a look at our page on Workflow to see how doing things right can save you time and money.

Profitability

Are you selling at high enough prices to make a profit and produce positive cashflows?

If a business with £200k turnover increases its prices by 5% then it makes £10k more profit all of which ends up in the bank!

Improving profitability can have a huge impact on cashflow so why not test higher prices on some of your customers, products and services and apply what you learn across your business?

Profitability blogs:

Cost control

If your business is spending too much money and perhaps making a loss then stem the tide now.

Cut costs, including what you take out yourself, and get the business back in to profit as a matter of urgency and survival.

Even if your business is making money, it doesn’t hurt to review your cost base. Some costs embed themselves in companies – fossilised costs – and need to be found and questioned from time to time.

Go on a fossil hunt

Have you got the wrong clients?

Too many businesses tie themselves in knots by over-servicing and under-pricing their work. There can be many justifications for this, rapid growth being the most common.

But in the longer term, if your clients are not profitable and are getting in the way of more profitable opportunities then they are the wrong clients.

Renegotiate their prices and don’t worry if they leave.

Here’s a salutary tale – I can’t have the business I want because of the business I’ve got!

Poor cashflow is both a problem and a symptom. It also has solutions.

We’re accountants in South West London and if you think we can help your business cashflow give us a call on 020 7125 0270 or email me at info@bluedotconsulting.co.uk.

Michael

Related links:

Cashflow

Winter is coming – be prepared!

Improve profitability – in five simple steps

Blue Dot Consulting Limited

Profitable pricing – goes right to the heart of your business

There is no point in “buying” sales with low prices that you can’t make money from.

Profitable pricing is a virtuous circle if you get it right and a vicious circle if you get it wrong.

So, how do you get it right and price profitably?

How profitable is your pricing at the moment?

Astonishingly, too many businesses simply don’t know how profitable their products and services are because their management accounting processes are not up to the task.

It’s not just the costs and revenues that need to be measured.

If yours is a service business then time is literally money and logging time spent on each client, at least in a way that’s “roughly right” and not “precisely wrong”, will provide invaluable information about how profitably you’re performing client work.

So step one is to make sure you have the management information you need to measure profitability accurately.

Step two is to act on it.

Be competitive but profitable

There is no doubting that the business climate is tough.

But competitive doesn’t have to mean cheap and you don’t have to abandon profitable pricing. There’s only room for one lowest-cost firm in your market and if that is not you then compete on other aspects of your product or service such as:

  • quality
  • delivery times
  • customer service
  • experience
  • understanding of your client’s business

Look at your competitors and see what fronts they’re fighting on (or not) and look beyond your own market for ideas about how to position your business so that it stands out from the crowd.

Have the confidence to walk away

Sometimes when you make a pitch that embraces profitable pricing the client or prospect will say you are too expensive.

It’s important to negotiate but one of the options here is to walk away – you just need to be polite and have the confidence to do it. There is no point in “buying” sales with low prices that you can’t make money from.

You might be nicely surprised at the reaction when you walk away – the buyer might really quite like you and be prepared to pay what you want simply because you’re a great fit for their business!

Also, think about the lifetime value of a client. Establishing a good working relationship now at lower prices than you’d ideally like might be the foot in the door for a long-term relationship in which you can increase prices or lower the costs of doing the work in the future and make the profits you want.

If you adopt this approach then make sure you’re clear that prices will go up so there are no surprises.

Offer an introductory discount, fix the price for six months only, think how landlords offer rent-free periods, there are lots of examples of how to do this so you do not end up with permanently low prices and a contract you can’t make money out of.

The virtuous circle of profitable pricing

Profitable pricing falls straight to your bottom line.

This translates into more money in the bank, provided you deliver what you promise and are on top of credit control, and the value of your business increases.

But it’s more than just a financial thing. Everyone feels better in a business that’s performing well. Some of the profit can be reinvested in training, in new products, new markets and rewarding everyone involved.

And, of course, pretty much the opposite happens when you don’t get it right.

Good luck with your next pitch!

 

Michael

 

How to build a simple cashflow model and keep it running

At the time of writing this blog, Molly’s cashflow model has been running for nine months and she’s become excellent at forecasting, managing and improving her cashflow and her profitability.

If your business needs a cashflow model then take two minutes to see how we go about building a simple, useful model and keep it going for as long as it’s helpful.

Press play and also use pause as there’s a lot to take in on some of the pages.

Keep your cashflow model up to date

As you can see in the video, getting your bookkeeping up to date is an essential building block as is keeping it up to date.

At the start of the new month we update the cashflow model for the receipts and payments that occurred last month and make sure the closing balance in the cashflow model agrees to the reconciled bank balance(s) in the accounting software.

Then we discuss with the client what is likely to happen over the next three or four months.

The primary focus is on sales and payments by debtors. Then we look at the outgoings.

Only then can we see if there will be any problems to navigate, quarterly pinch points, and we can put solutions in place.

Forewarned is forearmed!

Pro tip: we rarely look beyond the next three or four months in the forecast. The sunlit uplands of a year down the line can take care of themselves but you won’t reach them if you can’t navigate the next three or four months.

How a cashflow model improves cashflow

Firstly, if you can measure something then you can improve it. So, simply having a cashflow model at all will focus attention on cashflow issues and how to solve them.

The areas to look at for improvement are typically:

  • Profitability – making more money from every sale will improve cashflow
  • Credit control – improve your debt collection so you receive payments from debtors sooner and stop selling on credit to poor payers
  • Have one creditors payment run a month – this helps you to set a target for sales and debt collection. Also, your suppliers will get used to a reliable pattern of payments from you which will be very helpful
  • Agree phased payment terms with suppliers if you need to and make sure you stick to them
  • Cut costs to save money and conserve cash

All these measures can improve cashflow and you can see the effect of them very quickly.

Practice makes perfect. At the time of writing this blog, Molly’s cashflow model has been running for nine months.

The financial management of her business has improved beyond recognition and Molly has become very sure-footed at forecasting, managing and improving her cashflow and her profitability.

History can repeat itself. As time goes by you build up a month by month cashflow history which becomes ever more useful and is a great reference point, particularly for a seasonal business.

How can Blue Dot Consulting help with your cashflow?

Quite simply, we know what to do and we can work with you to get your cashflow model in place very quickly, as well as bringing your bookkeeping up to the standard your business needs.

No bells, no whistles, no fancy graphs or apps – just a cashflow model that works for you.

Let’s have a free-of-charge chat about your business – call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk

Michael

Related links:

Ten ways to get paid on time

Why two bank accounts are better than one

Bookkeeping for business

© Blue Dot Consulting Limited

Chartered Accountants – Bedford House, Fulham Green, London, SW6 3JW

How to use QuickBooks to get paid quicker

We can take you through all the steps from invoicing to reporting and help you automate as much as possible so QuickBooks does the heavy lifting.

Late payment is a problem for too many businesses. But if you’re a QuickBooks user there are tools in the product that can help you get paid quicker.

But before we look at QB, here are two things you could do immediately to speed up payments in the future:

  • Use a direct debit service such as GoCardless and be wary of any customers who won’t sign up to pay by direct debit. The interface between GoCardless and QuickBooks is excellent, by the way
  • Take extra care to identify potential bad payers and don’t sell to them in the first place

Why credit control matters for your business

“A sale is a gift until it’s paid for” is a great maxim to spur you on to get paid on time.

Businesses run much more smoothly if cashflow is positive and they fail if they run out of money. Getting paid on time is a big part of having a strong cashflow and the benefits include:

  • less stress about paying suppliers and staff on time
  • low or no costs of borrowing which improves profit
  • having funds available to invest in new products, services and markets
  • you can pay yourself more!

It makes sense to get paid quicker so, if you’re a QuickBooks user what tools are available?

Invoicing in QuickBooks

Raise all your invoices promptly, accurately and send them as emails with the PDF document as an attachment to make them easier for your customer to process.

There are various settings you can use (from the company cog in the top-right corner) to enhance your invoices:

  • preferred payment terms (e.g. 30 days)
  • include your bank details on the face of your invoice
  • default delivery method
  • customise the email message when your invoices are sent

Pro tip: You can set up invoicing to be recurring if you send the same value invoice to the same customer every month. Recurring invoices can be emailed automatically on the same date each month.

Automated payment reminders

Switch on automatic payment reminders (from the company cog in the top-right corner).

You can create up to three automatic reminders to be sent to debtors, choosing the timing and the content of the emails to suit your business.

For example, you could time yours to go out ten days BEFORE the due date and five and ten days AFTER the due date with an email message that becomes progressively tougher.

Pro tip: Make sure you include your bank details in the email text and make sure your customer details are set up to include, where you can, a first name as this can be pulled in to the automated emails.

See who owes you money with credit management reports

QuickBooks has twelve standard reports to help you get paid quicker.

Take a look at them to see which ones will be helpful then customise the useful ones and save them as Custom Reports. Customisation lets you:

  • Change ALL reports so they start with the largest invoice / debtor balance at the top and the smallest (which could be negative) at the bottom
  • Display all negative values in (red and in brackets) so they jump off the screen at you
  • Edit the report title so it’s immediately clear what it’s about (“Debtors list” instead of “A/R Ageing Summary Report”)

In the Related Links at the bottom of the blog are two great examples of how to customise QuickBooks reports to help you get paid quicker.

Pro tip: You can schedule reports to be emailed to different people in your business so send the credit management reports to the management team and to everyone who can help chase customers for payment.

How Blue Dot Consulting helps clients with QuickBooks and getting paid quicker

We’ve been using QuickBooks for over twenty years and have helped scores of businesses make the best use of it for their bookkeeping, financial management and, yes, credit control.

We can take you through all the steps mentioned here from invoicing to reporting and help you automate as much as possible so QuickBooks does the heavy lifting.

On our half-day QuickBooks training sessions we work with QB users on their live QB file and show them how to use the functionality that best suits their business. We also focus on reports, how to customise them and share them across your organisation.

Let’s book you in! Call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk

Michael

People also ask:

Should I use credit control apps and add-ons such as Chaser?

Every business is different and will have a unique profile of customers to collect money from. Establish the credit control tools and workflows that are right for your business first and use the tools already available to you in your chosen accounting software.

Then, if an app or add-on would make everything more efficient, you can look at adopting one. And you know what it needs to do.

What about a good old-fashioned phone call?

Always chase your biggest debtors with phone calls. No ifs, no buts – get on the phone!

Do we need a cashflow model?

There are two types of business. Those that do NOT need a cashflow model and all the others! If you’re one of the others then get cracking as soon as you can. This blog might be a good place to start:

A gory cashflow model is a useful cashflow model – the bloodier the better

Related links:

Customer timeline report – a window into the soul of your customers

Create a bespoke Aged Creditors report in QuickBooks

Why two bank accounts are better than one

© Blue Dot Consulting Limited

Chartered Accountants – Bedford House, Fulham Green, London, SW6 3JW

We can’t send you your invoice because our accountants are so behind with processing direct debits

Normally I’m delighted to hear that a business is getting paid by direct debit because DD is the silver bullet of credit control.

But when I heard a senior manager in XYZ Limited say this about their invoicing and their accountants, you could have knocked me down with a feather!

So, let’s see how they could have avoided getting into this mess in the first place.

Raise your sales invoices as soon as you can

Every business needs to raise its sales invoices as soon as it can. Make sure they are:

  • correctly describing the goods / services sold and are correctly priced
  • addressed to the correct person and contain a PO number if required
  • sent by email – ideally as a PDF not as a link. Why make it difficult for your customer?
  • accounted for as soon as possible if they’re not raised in your accounting software

Do this and you know how your business is performing from a sales perspective and you know how much money you are owed.

Get cracking with credit control straight away

Credit control differs for every business but however you go about credit control get started straight away so your invoices have the best chance of being paid on time.

This blog isn’t about credit control but there are a couple of links at the end which you might find helpful if you’re a bit rusty.

This blog doesn’t need to be about credit control because XYZ Limited gets paid by direct debit!

What could have been done differently?

It so happens that we use the same direct debit provider as XYZ Limited and this is how we would have gone about things.

The first step is to link the direct debit service to your accounting software.

As new clients come on board you send them a direct debit mandate to complete, stating your payment terms clearly so the client knows when their payments to you will leave their account.

Pro tip: If a client won’t sign up to direct debit you should seriously consider not working with them as they could well turn out to be a bad credit risk. And who needs that?

Raise your invoice, using the agreed payment terms, and send it to your client.

Sit back, relax and you’ll be paid on time. And if you use the combination of DD provider and accounting software that we use, the accounting for the payment will be done automatically.

Bookkeeping in the 21st century

There’s a link below to a blog about this.

Essentially we live in an age in which all sorts of online platforms exist for making sales and receiving customer payments.

This is generally a good thing but it does require businesses, bookkeepers and accountants to know what they’re doing and walk through every step of the sales process, from order to payment, making sure everything happens in the right order and is working correctly.

You establish workflows that work and scale from there.

It seems that XYZ Limited and their accountants have somehow tied themselves up in knots with a very visible outcome – XYZ’s clients aren’t getting their invoices even though they have made their payments.

Not a good look for XYZ Limited!

Workflows, accounting, getting paid – can we help?

Let’s have a free-of-charge chat about your business – call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk

Michael

Related links:

This is bookkeeping in the 21st century

Five tips to improve your sales invoicing

Getting paid on time – your company is NOT a source of alternative finance!

© Blue Dot Consulting Limited

Chartered Accountants – Bedford House, Fulham Green, London, SW6 3JW

What value does an FD add – and why you don’t need one

This gives your business the best of both worlds – the senior financial input you need but without a full-time cost. It’s a solution that an FD would be proud of!

What value does an FD add to any business?

Broadly, there are four things a good FD adds to any business:

1. Financial information

No business can last for long without solid, consistent, up to date performance information that looks at:

  • P&L, compared with budget, last year, forecast
  • Margins
  • Debtors
  • Cashflow forecast
  • Client & product / service profitability

2. Financial controls and processes

Mostly, these are routines that happen every day, week or month and need to work like a well-oiled machine:

Without these processes and systems working well, the financial information required simply won’t be produced in a useful way.

3. Getting other areas of your business to be aware of financial issues and constraints

Ensuring that everyone in the business is aware of the financial dimensions of their job, particularly when making decisions.

4. Being involved in occasional and one-off decisions and projects

Investing in new assets, buying / selling businesses, promoting or recruiting senior staff, lease renewal. These are some of the issues that pop up from time to time and require experienced financial input. But they don’t arise every day.

All of this is important, so why don’t I need an FD?

The tasks listed above are either routine, day-to-day or monthly tasks or they’re occasional issues that pop up rarely. The routine tasks can be dealt with by good bookkeeping and accounting staff, or they can be outsourced.

The occasional issues are exactly that and don’t need an expensive, permanent presence to deal with them.

If not an FD, then what’s the alternative?

A far better answer for most businesses is to enlist the help of people like Blue Dot Consulting to act as a part-time FD to:

  • put in place the financial processes and controls you need
  • train and coach existing staff to do a more demanding job
  • ensure the right information, bespoke to your business (not the standard reports that you currently get from your accounting system), is coming out to those who can act on it
  • maintain an ongoing presence in the businesses to ensure that everything continues to run as normal
  • pitch in to the occasional decisions as and when required

This gives your business the best of both worlds – the senior financial input you need but without a full-time cost.

It’s a solution that an FD would be proud of!

Call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk and let’s have a free-of-charge chat about your business.

Michael

Related links:

Bookkeeping for small business – don’t get lost, get help

You can’t run a £1m business and only have your bookkeeping updated every three months!

Part time Finance Director

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Chartered Accountants – Bedford House, Fulham Green, London, SW6 3JW