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Displaying items by tag: Cash Flow

When talking about having a good Accounts Management System, my primary aim is to encourage businesses to ensure they protect their cash flow while still give their customers quality service through processes and systems. These systems need to support your cash flow and verify that your customer can pay.

A good accounts management system is a crucial element of the broader systems for running your business.

Most business break down the systems into three areas;

  1. Operations
  2. Sales and marketing
  3. Finance

Many people believe, what their accountant does, is the finance element. I am here to tell you, this is a big mistake, while your accountant is very important, their role is to bring everything together for compliance purposes. Your finance system is, everything that needs to happen so your accountant has the correct data to work with.

Your role as a business owner or manager is to make sure the systems are in place for your team and customers. Everyone needs to have a full understanding of how it works. The systems are to keep your customers paying on time and the cash flowing into your bank accounts. However, more importantly, you must make sure your customers have the ability to pay you before any work is carried out.

No matter what type of business you are running the finance element is always the same, in my debt collection agency we see many different types of businesses and the problems are no different. Over and over we see the same mistakes made.
 
While putting together a system, your finances may not be where your interest lay; it is such an important part of being successful. Knowing where to start and what to do can be very confusing and can take time if you are busy elsewhere.
 
I have put together a free course that will take you through all the elements of a good accounts management system. Follow this link

It is important you have customised Terms of Trade. These are the rules of your business, and they should reflect how you want your business interactions with customers to be. These are the main elements that trip many businesses up, especially when a customer is not happy and refuses to pay.

Your system needs to have an easy way to keep the cash flowing; this is a task that must be carried out on a regular basis. It would be wise to make sure you have trained staff to carry out this job and in my 7 Lesson in Accounts Management; lesson 1 is the debt collection process; you can access this for free on this link. Following up on outstanding accounts is the only way to keep the cash flowing.

By the way, your bank account balance is not cash flow, Your debtor’s ledger measures your cash flow. You should concentrate on keeping it at 45 to 60 days at the latest.

Do you have a Bookkeeper?

I suggest having a bookkeeper to keep tabs on your accounts, this way you have a second person to whom you are accountable.
 
I never use my business account to purchase personal items. Instead, I pay myself a percentage of the income from my business.
 
We see many business people get into difficulty because they use the money in the bank for expensive items with no plan for unexpected bills or even their tax.

Do you have business document templates?

Do you have all the necessary documents required to support your business activities? By this, I mean forms, letters, quote sheets, etc. These are the core policy documents for a good accounts management system; these documents should be customised with your logo and information to suit your business. They should be in a ready to access place, so when you need to send a client a document you just need insert their name and address.

Published in Blog

Let’s face it one of the first things you think of when you go into business is not who is going to follow up on late payers and manage the list of debtors. The reality is that this role is largely one of the most important and usually ends up being the last thing on the list and mostly ends up on the list because there is a problem.

It may not be so bad if you only have a few companies that are late payers, but I know in my business that is not the case.

Bizarrely it is not our debt collection client but the work we do on behalf of other debt collectors that are the late payers. We have a dedicated person who’s role is to follow up on these clients. It is tedious that we have to have a dedicated person doing this role, why can’t our clients just pay on time, one thing I do know is that without that person our cash flow would severely suffer.

We all know how important cash flow is, my dear dad used to always say to me ‘Nichola cash flow is king’.

It makes me sad when we get clients who are suffering from cash flow issues, which is compounded by high volume clients paying late. The problem is we get too emotionally involved when it comes to asking our big clients for the money, we get scared we will lose them as a client.

The following up on money should be done by someone who is not emotionally connected to the outcome and all they are there to do is get the money back.

If you don't have a person in your business dedicated to chasing up aged debtors, what steps can you take today to fill that role? And if you do have such a role already, do they have clear guidelines on when and how to follow up effectively with clients to protect your cash flow?

We'll cover those issues in upcoming emails.

Published in Blog

Learn the key elements to making sure you get paid for the work you've done.

Haven't signed up yet? Really?! Well, here's what your missing out on...

  • Full Access to The Seven Steps to BCA Debt in your Business and the 7 Lesson in Accounts Management. +

    There are 7 steps that we walk you through, these steps build your accounts management system which ensures you get paid for the work you have done and you know your customers have the ability to pay you before you do any work for them. Read More
  • Terms and Conditions +

    We walk you through this process to ensure you have the ultimate Terms and Conditions, customised to suit your business. Read More
  • The Debt Recovery Blitz +

    Get your money back into your bank account, we will help you increase cash flow from within your debtors ledger. Read More
  • Core Policy Document Suite +

    You we give you a suite of documents designed to support your Accounts Management System, everything you need to raise your standards in customer service. Read More
  • Current Customer Induction +

    These are your business ambassador’s show them how you you are improving your systems and ultimately the service you provide them.
  • Collateral Update +

    Ok, this is all the annoying little jobs that need to be done, like update the website T&C and Privacy Policies. We have streamlined this for you and give you the html docs to get your web developers to upload. Read More
  • Secure your Assets +

    We help you determine if your business would benefit from the Personal Property Securities Register, which can put you on equal footing with secured creditors like the banks. Read More
  • Debtor Management 2.0 ??? +

    Make sure your customers have the ability to pay you before you have even done any work for them. Read More
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In a recent survey my clients
identified having a system for

Accounts Management

to be one of the top area's
they struggled with.
LEARN MORE