Category: Profit

What To Do When a Client Won’t Pay

Posted on | by Jessica Weston | Leave a Comment on What To Do When a Client Won’t Pay

Many business owners have experienced the frustration of trying to collect payment from a client who simply won’t cough up. If you are having trouble getting paid, then it is important to take action quickly before the situation becomes even more difficult. In this blog post, we will discuss what to do when your clients won’t pay, and how to avoid this from happening in the future.

Don’t Make Assumptions

When your client does not pay, it is easy to assume that they are being completely irresponsible. However, sometimes clients have legitimate reasons for why payment has not been sent out. It’s important that you don’t accuse them of anything until you know the full story. This is especially true if your client has always been reliable in the past – give them the benefit of the doubt.

Keep Your Cool

In the heat of the moment, it can be easy to want to send a strongly worded email or make an angry phone call in order to get your point across. However, if you take this approach, then there is a good chance that you will only make matters worse and put future business at risk. It’s important not to jump the gun.

Send Reminder

Your clients are only human. If a client is late to pay, resend the invoice along with a polite notice that their payment is now past due. Don’t be demanding or accusatory. You should also make it as easy as possible for them to pay by including links or buttons to your accepted methods of online payment.

Contact Them Via Social Media

If your client doesn’t respond to your follow-up emails within a few business days, try contacting them on social media instead. In some cases, a client might simply be neglecting their inbox and so it’s worth trying another channel. Again, it’s important to maintain professionalism and not accuse them of disappearing on you.

Send an Attorney’s Letter

If you still have not received your payment then it’s time to send an attorney’s letter. You can arrange this for an affordable fee and often the client will be unnerved enough by the suggestion of legal action that they pay up.

Small Claims Court

If you have exhausted all other options, then it’s time to take your client to small claims court. This is a last resort and it’s a fairly costly option, so it’s important to weigh up whether or not it’s worth it. Unfortunately, if this is not the case then it’s best to cut your losses and focus on preventing this kind of behaviour in the future.

Protect Yourself

It’s always better to be safe than sorry. Take steps now that will protect you in the future and avoid having this problem again.

One way to do this is by introducing late fees. Your cloud accounting software should be able to calculate and add these for you automatically. 

If you do decide to introduce late fees, be sure to communicate this clearly with your clients and give them plenty of notice so that they can’t accuse you of taking them by surprise.

You should also make sure that all of your clients are aware of how to pay online so that they have instant access to their account details at any time.

In addition to this, you should consider asking for payment upfront to protect yourself.  This could be a 30%, 50% or even 100% deposit.

Finally, make sure that you have the right legal contracts in place  so that you are better able to take action if a client still fails to pay.

Conclusion 

If you find yourself in a situation where your client hasn’t paid you, it’s important to keep calm and take the proper steps. Make sure that before taking legal action, you’ve exhausted all other options by sending reminders and social media messages. If these tactics still do not work, then consider contacting an attorney or small claims court for assistance with collecting payment from clients who won’t pay on time. Finally, make sure to put the right steps in place to protect yourself against this situation in the future so that you can concentrate on running your business rather than chasing up payments.

4 Ways to Improve the Financial Health of Your Small Business

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A business health check is never a bad idea and even if you’re doing okay, there are always ways to improve. It’s important to closely monitor your business’ “vital signs” and look for ways to fine-tune your processes to ensure that it continues to thrive. Let’s take a look at four ways to boost the financial health of your small business.

1. Identify New Streams of Revenue

Markets can shift rapidly, which means you should always keep an eye on how the landscape is evolving and look for new opportunities to capitalise upon. Identifying new streams of revenue can help to future-proof your business and increase your profits. Take a look at your current sources of revenue and identify which ones may deserve more of your attention. You should also give your employees a chance to offer their ideas on new ways to generate income.

If you’re struggling for inspiration, why not examine business owners who were forced to rapidly pivot during the covid-19 pandemic. Event photographers, for example, began selling digital prints and online courses. Restaurants switched to takeaway only and started offering special delivery packages for occasions such as Christmas and Valentine’s Day to boost sales.

2. Increase Profitability 

Profitability is key to the longevity of a business and an important indicator of success. Therefore, you should always be thinking about ways to boost your margins. Adding revenue through new sources of income, raising your prices or increasing average customer spend is one way to do this. 

However, it’s important to keep your costs as low as possible, too. Regularly review and remove expenses that don’t add value to your business or customer. Consider eliminating products or services that do not generate significant revenue or profit so that you can focus on the ones that really make you money.

Boosting your customer retention rate is another important way to increase profitability. Research shows that increasing customer retention by 5% can boost your profits by 25-95% because not only is retention significantly cheaper than acquisition, repeat customers also spend more.

3. Manage Cash Flow 

Profitability is important, but cash flow matters just as much so don’t sacrifice one in favour of the other. Plenty of profitable businesses have gone bankrupt because their assets were tied up and they ran out of cash. It’s vital that you stay on top of your monthly incomings and outgoings to ensure that your business stays flush with funds.

Insight is the key to effective cash flow management. You must carefully keep track of all the money that enters and leaves your business. It’s important that you understand your days cash on hand – namely, the number of days you have until cash runs out. Ideally, you should have 45 days or more.

You can improve cash flow management by:

  • Staying on top of your invoices
  • Shortening payment cycles
  • Introducing late payment fees 
  • Offering bulk or annual discounts 
  • Using a business credit card 
  • Carefully managing inventory
  • Creating a cash reserve that you can dip into in case of emergency

4. Increase Productivity 

Increasing productivity means that you can do more without spending more, and thus improve profitability. Research by Gallup found that highly engaged teams show 21% greater productivity, so it’s important to motivate your staff and ensure that they are working at their best. 

89% of HR leaders agree that regular feedback is crucial to building a successful team, so prioritise regular check-ins and make your employees feel heard. Offering flexible working options can also be helpful to increase productivity as research shows that this makes staff feel appreciated. AirTasker also found that flexible workers put in an average of 1.4 extra days per month than traditional employees, which adds up to over 16 days, or three weeks, per year. 

Summary 

However well your business is doing, there are always ways to improve. Just as it’s important to check in with your employees regularly, it’s also important to schedule time to review your revenue, profitability, cash flow and productivity to eliminate potential problems and identify areas for improvement. This will ensure that your business stays financially healthy and continues to thrive for years to come.

Understanding your revenue drivers

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For your business to make money, you need to generate revenue.

You produce revenue through your usual business activity, by making sales, getting your invoices paid, or taking cash from paying customers. So, the better you are at selling your products/services and bringing money into the business, the higher your revenue levels will be.

But what actually drives these revenue levels? And how do you get in control of these drivers?

Knowing where your cash is coming from is more crucial than ever

As a trading company, you face the multiple challenges of a global recession, an increase in online consumer buying and a ‘new normal’ when it comes to trading, markets and buying expectations. The better you can understand the nature of your revenue and its drivers, the more you can flex, manage and control your ability to generate this income.

This helps your medium to long-term strategic thinking, and your decision-making, allowing you to be confident that you’re focusing on the business areas that deliver maximum revenue.

Import areas to consider will include:

  • Revenue channels – where does your revenue actually come from? Do you create income from online sales and ecommerce, through retail sales in bricks and mortar stores, or through wholesales to other businesses? You may focus on just one of these channels, or it could be that you use a mixture of two, three or more. 
  • Revenue streams – your total revenue will be made up of a number of different ‘streams’ So, you might be a coffee shop, whose revenue streams include coffee sales, cake and pastry sales and lunch sales. Knowing which revenue streams you rely on, which are most productive and what return they are delivering allows you to make decisions. If 80% of your income comes from 20% of your products, perhaps you need to tighten up your product range and ditch some of the poor sellers. If you’re selling more services to one particular industry, perhaps you should focus more marketing in this specific niche, or downscale your sales activity in less profitable niches.
  • Product/service split – Do you know which products/services are the most profitable in the business? Which products/services have been resilient to market changes (giving you some revenue stability) and which have adapted well to change? The more you can dive into your metrics and find the most productive and adaptable products and services, the greater your ability is to provide constant and evolving revenue for the business.
  • Value vs volume – Is your revenue based on selling a high volume of products/services at low margin, or low volume at a high margin? Based on this, can you move your margin down to create a more attractive price point (and more value for customers)? Or are their ways to push volume up, shifting more units and boosting total revenue? By diversifying into new channels, new streams or new products/services you can aim to balance value and volume to create brand new sales – and higher revenue levels. 

Talk to us about exploring your revenue drivers

If you want to boost revenue and increase your overall profitability, come and talk to us. We’ll review the numbers in your business, help you to understand your revenue drivers and will give you proactive advice on enhancing your total revenue as a company. 

Get in touch to kickstart your revenue generation.

Is your cost of sales affecting your gross profit?

Posted on | by Jessica Weston | Leave a Comment on Is your cost of sales affecting your gross profit?

Do you know how much it costs you to produce each product or service in your range? 

The better you can understand this cost of sales – or cost of goods sold (COGS), as it’s more commonly known – the more ability you have to control your company’s profitability. When you know your COGS, you can set the right price point, control your profit margins and ensure that you’re maximising your gross profit.

But to do this, you need to understand COGS and how it impacts on your financial management.

Understanding your COGS

To take one of your company’s products or services from inception to delivery, you will incur a number of costs. For example, if you’re a manufacturing business, these costs might include buying in raw materials, direct labour costs, the overheads for running the machinery in your factory, the costs of delivering the products and the sales and marketing expenses needed to sell the product to your target customers.

For you to manufacture a finished product and to generate a sale, all these costs are a necessary part of the process. They’re the direct costs of producing your goods for sale.

You calculate your COGS number for the period by looking at the value of your opening stock (or inventory), adding the cost you’ve incurred to produce the goods and then subtracting the value of the closing stock balance.

The COGS formula looks like this:

Opening Stock + Purchases – Closing Stock = COGS

So, if you started with an inventory of ￡10,000, this is how you’d calculate your COGS:

  • Opening Stock: ￡10,000
  • Purchases: ￡25,000
  • Closing Stock: ￡8,000
  • COGS: ￡27,000

Reducing your COGS to boost gross profits

The more sales you make at a given price, the higher your revenue (income) will be. Deducting your COGS number from your revenue figure gives you your gross profit – and gross profit is a key metric for tracking the health and profitability of your business.

A high COGS number reduces the size of your profit margin. And, in turn, a small margin will start to have a negative impact on your gross profit. Being able to control and manage your COGS, and its impact on your gross profit, is a vital skill for any product-based business.

Here are some ideas for improving the profit impact of your COGS:

  • Reduce your supplier costs – If you can reduce the size of the purchases made to produce your goods, that means less expenditure and less impact on your profit margins. Try shopping around for cheaper suppliers, or negotiating better prices with your existing suppliers to bring down costs. 
  • Streamline your production process – the more complex your production process is, the more overheads and production expenses there will be. Taking a lean approach helps you to continually evolve your processes and remove the extraneous elements – cutting costs while still delivering a quality product. 
  • Increase your prices to boost your margins – if your COGS number is eating into your profit margin, one way to resolve this is to increase your price point. This will help to increase income and boost your margin but does require caution. If prices get too high, this can damage existing customer relationships and make you uncompetitive in the market – so think carefully about any price increases before taking action.

Talk to us about improving your gross profit

If you want to boost your gross profit and get COGS under control, come and have a chat with us. We’ll look over your expenses and overheads, and will look for the opportunities to reduce your goods-related purchases and push for a better profit margin on your products.

The Fear of Money and Four Ways to Overcome Your Money Blocks

Posted on | by Jessica Weston | Leave a Comment on The Fear of Money and Four Ways to Overcome Your Money Blocks

Few people are wizards at making money. But it IS possible for anybody to get rid of their money blocks.

Businesses exist to make money. But even with that goal in mind, it doesn’t mean it’s an easy ride to the top.

Money blocks are all too real and common in personal and business finance. Learning to overcome them is an essential thing to do early on.

Here are four ways to help you overcome your own fear of money.

1. Acknowledge the Fear

As is the case with any fear, the first step to overcoming fear of money is to recognise it. Do that and it becomes easier to identify what’s actually scary.

Do you fear the thought of losing money? Or do you fear not making enough money?

Acknowledging your fear, whatever it may be, helps identify the real underlying issue. 

2. Ask for Help

Whether it’s personal or business finances, there’s always someone out there that knows more. 

People who hit money blocks and develop a fear of money are those that never ask for help. But there’s no shame in asking someone more qualified about what you can do in this regard.

Accountants, financial advisors, successful investors and entrepreneurs are all people that may be able to help. Salespeople and professional marketers can also provide insights into specific money problems.

3. Ask for Money

Are you not generating enough revenue? If so, why not consider asking for money? 

Do your due diligence on potential partnerships, investments, and loans.

In some cases, overcoming a money block simply requires an influx of capital from outside sources. It may not seem like the most appealing idea, but it is an option.

4. Develop New Money Habits

Sometimes, the best way to overcome a block is to step outside the comfort zone. 

People run into money blocks because they are fixed in their ways. That’s why making adjustments and developing new money habits can help overcome the fear of money.

It will take work and time. But you already know that one’s mindset can’t be changed in an instant. 

The idea is to try new things and make progress. After all, small successes add up and can alter the mindset.

Taking Action

The fear of money and money blocks don’t always cast a veil on what needs to change. It’s possible to identify solutions and still not overcome fear.

Why?

It’s because the fear of failure can also creep in. When that happens, people refuse to take action and make the required positive changes.

Tackling the fear head-on is always a good thing. Identify what action you should take and pull the trigger to break through the money block.

Learn to Overcome Common Money Myths

There are well-founded fears in the world. But when it comes to entrepreneurs and business owners, the line between facts and myths involving money is not all that clear sometimes. 

It’s vital to learn more about the economic environment as those without knowledge of this area can fall prey to money myths. 

They can end up creating entirely fictional and impossible scenarios for why they have money blocks. That’s also a reason why it’s difficult to see the solution when the issue doesn’t have a strong foundation to stand on.

Do you want to move past your money blocks? Book a call with us today www.sunnysideaccountancy.co.uk/contact

5 Ways to Grow Your Small Business Without Breaking the Bank

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Small business growth often requires hefty investment, but there are ways of growing and improving your enterprise without spending a huge chunk of cash. If you’re trying to build your business on a conservative budget, take a look at the following seven wallet-friendly ways to grow your small business. 

1. Analyse Your Marketing Efforts 

Fine-tuning your marketing efforts can help you use your marketing budget more wisely and achieve a better return on investment. Take a look at the marketing strategies you’re putting the most money into and work out which ones are driving sales. Tools like Google Analytics can help you figure out where your website traffic is coming from, allowing you to prune the practices that aren’t serving your business and focus on the ones that are achieving real results. Social media tools like HootSuite can also give you a clearer picture of the type of content that engages your audience the most. 

2. Fine-Tune Your Website

Many business owners build a website and then consider it a job done. However, your website should be regularly reviewed, optimised and updated to make sure that it’s delivering the best possible results for your business. 

Make sure that your contact information is correct and visible on each page. Strive to improve your loading times – for example, by compressing images – to boost your SEO score. Focus on local SEO strategies to find new customers in your local area and make sure that your site is content rich to attract a bigger audience. 

3. Take Advantage of Trends 

Show your customers that you’re an agile organisation by creating content, products and offers that reflect what is happening in your community and industry. For example, in recent years there has been a rise in micro influencer marketing and a focus on shopping locally due to the covid-19 pandemic. You could capitalise on this by collaborating with micro influencers in your local area, proving that you’re an on-trend business at the heart of the local community. 

4. Upgrade Your Sales Funnel with Content Marketing

If you generate a lot of leads but relatively few sales, then something is going wrong somewhere in your sales funnel. Either you’re not filling the top of the funnel with the right kind of leads, or you’re not nurturing them appropriately to convert them into paying customers. 

One key way to convert leads who are not yet ready to buy into paying customers is nurturing them through content marketing. A first-time visitor to your site will rarely make a purchase, so you need to give them a good reason to keep on coming back. When you share content to your audience every single day, you remain front of mind and build trust. Then, when a prospect becomes ready to buy, voila – you’re right in front of them. 

5. Understand Your Finances 

Knowledge, as they say, is power. Gaining a deeper understanding of your small business’ finances will empower you to make better decisions and grow your business more effectively. Using cloud accounting software such as Xero or Quickbooks can be enormously helpful here, as these programs create easy-to-understand reports and summaries. If you work with an accountant, be sure to consult with them regularly and don’t be afraid to ask questions – a great accountant is not just a number cruncher, but a partner and guide.

Summary 

Growing your business does not need to break the bank. Often, accelerating small business growth is a case of fine-tuning practices that are already in place and capitalising on the opportunities that are already in front of you. By working to improve your existing website and sales funnel, you can generate more high quality leads and nurture them to become paying customers via content marketing. It’s also important to remain agile and respond to local and market trends. Finally, it’s essential that you understand your finances so that you can make smart financial decisions that will really benefit your business growth. 

6 Ways to Boost Profitability for Your Small Business

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Every small business owner would like to boost their profits, but it’s easier said than done. In fact, research by SmallBizTrends found that only 40% of small businesses are actually profitable. However, by changing your practices, you can increase your margins to ensure that your business not only stays afloat, but has the means to grow and thrive. Let’s take a look at six ways you can boost profitability. 

1. Content Marketing 

Content marketing is a relatively low-cost way of ensuring that your business stays visible. By consistently publishing blog posts, videos and social media updates, your ideal customers are much more likely to happen across your small business. Furthermore, you’ll stay at the forefront of their minds so that they are more likely to come to you when they’re ready to buy. 

Of course, simply being visible isn’t enough. Content marketing allows you to demonstrate your expertise and help your clients solve their problems so that they see you as the go-to provider for your particular product or service. 

2. Create a Stable Cash Flow 

Cash flow is separate from profit, but it is still incredibly important to the financial health of your business. Positive cash flow enables you to grow your business and gives you the freedom to reinvest your capital, thereby generating greater profits. 

One way to improve your cash flow is to offer retainer contracts to your clients at a discounted hourly rate. This may seem counter-productive, but by doing this you are securing work for the long-term and strengthening client relationships, which is likely to lead to additional work in the future. 

3. Consider Outsourcing 

In order to increase profits, you need to cut costs. Whilst hiring new team members may not seem like the obvious solution, it’s important to consider the financial value of your own time. Consider how much certain tasks within your business are worth; if your time is worth £100 per hour, can you afford to waste several hours per day on £10 tasks? Outsourcing frees up your time and allows you to focus on the high value tasks that require your specific expertise. 

4. Cross-Selling

Another effective way to boost your profits is to introduce new products or services that complement your current offerings. A classic example of cross-selling is when a fast food worker asks you if you’d like fries alongside your burger. Other examples include a fashion boutique highlighting accessories to “complete the look” or a smartphone store offering protective cases for your new device. 

5. Shop Around with Suppliers 

If you’ve been using the same suppliers for several years, you’re probably not getting the best deal possible. Suppliers don’t reward customer loyalty, so shop around and see if you can find a lower price elsewhere. Besides, threatening to leave your current supplier often encourages them to be much more forthcoming with discounts and special offers. 

6. Remove Dead Weight

Are all of your products and services really generating a profit? In order to boost your margins, you need to analyse your current offerings and work out which ones generate the most profit. You may be surprised to learn that some of your products or services don’t generate much profit at all. You can then cut them out and focus solely on the practices that really do make you money. 

Summary 

Boosting your profits doesn’t just happen; it requires time and consistent action. By focusing on marketing, outsourcing lower value tasks and getting rid of products and services that don’t make you money, you will see a big increase in your margins. Furthermore, it’s important to maintain a healthy cash flow so that you have capital available to reinvest in profit-generating activities and shop around with suppliers to keep your costs low. 

How an Accountant Can Help Your Small Business to Succeed

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They say that behind every good business is a great accountant, and it’s true! A great accountant does far more than save you money on your tax return – although that certainly is an attractive benefit. Hiring a great accountant isn’t just about remaining compliant; it’s a big step towards improving the financial health of your business and can really help with planning for the future. Here’s how an accountant can help your small business to succeed.

Save Time

One of the most attractive benefits of hiring an accountant is the relief of not having to do it all yourself. Accounting is notoriously difficult and time-consuming – there’s a good reason why qualified accountants undergo so many years of training. A great accountant will save you many man hours and allow you to get back to growing your small business.

A Smaller Tax Bill

A great accountant won’t see you pay a penny more in tax than is strictly necessary. Many small business owners, despite their best efforts, end up missing out on tax deductions or incentives. The rules and regulations surrounding taxation are complex and ever-changing, so it’s best to have a qualified professional on your side who can help you to save you as much as possible.

Accurate Records

It’s important to maintain accurate financial records to ensure that mistakes don’t compound and spiral out of control. A great accountant will ensure that your records are impeccable so that you don’t end up with a tangled web of errors on your hands or worse, mistakes on your tax return that could come back to bite you.

Financial Planning and Stability

Cash flow can be very tricky to handle and it’s often difficult for business owners to get a clear picture of how much money is entering and leaving each month. An accountant will help you to manage your cash flow and ensure that there’s always enough in the bank to continue operations, even when times are tough. This helps to keep your business stable and running smoothly. You’ll be able to offer both your staff and your clients a consistent and positive experience, maintain high levels of trust and loyalty with both.

Furthermore, a great accountant helps you to plan for the future and make sage investments at the right time. They will use their financial acumen to help you to identify areas of improvement and plot for growth, so you’re not taking a shot in the dark.

Marketing

It may not seem obvious at first that an accountant would be able to help with marketing, but they may in fact be able to advise you on where to spend your money and which practices aren’t generating a worthwhile return on investment. This allows you to focus on the marketing activities that truly drive the needle for your business and cut back on areas that aren’t serving you. Furthermore, cash flow analysis can help you decide when to launch a new campaign and get a clear picture of the results.

Financing

Your accountant can help you to understand your financing options and weigh up the pros and cons of each. On top of this, they can help you to prepare the best possible case for potential lenders so that you get the best rates possible. All of this can be enormously helpful in terms of business growth. Furthermore, if you have existing debt, your accountant can help you to handle it in the most beneficial way possible for your business.

Summary

A great accountant is so much more than a number cruncher – they function as a partner and guide to help you make the best possible financial decisions for your business. Whether you’re in the startup phase or looking to grow your business, hiring a quality accountant is a decision you won’t regret.

The Most Dangerous Accounting Mistakes For Your Small Business

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Starting your own business is an amazing thing to do but it’s also notoriously risky. There’s a lot to think about when you first start out on your own and it can be tempting to put accounting on the back burner, but that would be a huge mistake. Good accounting is crucial to the financial health of your business and mistakes can be devastating, especially in the early days. It’s important to know which mistakes to avoid to ensure that your small business is around for years to come.

1. Bad Bookkeeping

New business owners are often overwhelmed and tend to neglect bookkeeping. However, it’s essential that you keep the books up to date and record all of your earnings and expenses. Without this data, you won’t have a clear picture of how you’re faring financially, which can lead to a myriad of nasty problems.

Meticulous bookkeeping allows you to spot trends, understand your spending and examine which practices generate the largest ROI. You can then leverage this data to improve the financial health of your business, maximise your profits and manage your cash flow. Staying on top of the books allows you to stay one step ahead and put out fires before they start.

2. Confusing Cash Flow and Income

The money you take isn’t the money you make.

£100,000 in revenue sounds great, but if you had to spend £30,000 on equipment, insurance and employees to make that money, you’re actually left with £70,000 profit. You’ll then have to pay tax on your gross profit, so the net amount will be smaller again.

It’s vital to know not only how much money is coming into your business, but how much is going out. Getting carried away with gross numbers is a common mistake that new business owners make, and it quickly lands them in hot water. It’s important to stay grounded in reality and know how much you’re really making so that you don’t overspend.

3. Using Outdated Practices

You’re a 21st century business and your accounting practices should reflect that. Online accounting and bookkeeping softwares are faster, easier and dramatically more efficient than ledgers and Excel spreadsheets.

Online accounting software is easy to learn and significantly reduces the margin of human error by automating processes and calculations for you. This means that you’re much less likely to make mistakes on your tax return. It also reduces the risk of making the wrong financial decisions due to inaccurate information.

With this type of software, you won’t have to spend hours updating and organising your financial information. Another benefit is that it allows you to locate and cross-reference information quickly and easily, without having to spend hours searching for the right files. It may be more expensive than the DIY approach initially, but using online software will save you many man hours.

4. DIY Accounting

Accounting is complicated; there’s a reason it takes accountants years to fully qualify. Trying to manage your accounts all by yourself is a surefire way to waste time and stress yourself out. Besides, without extensive financial knowledge it’s unlikely that you’ll be able to save a significant amount of money on your tax return. Furthermore, you’ll be heavily penalised for making even a minor mistake on your return which could cause financial problems for your business.

Trying to manage on your own is a drain on your resources so the sooner you seek professional help, the better. Investing in the services of an accountant is one of the best decisions you can make regarding the financial health of your small business.

Summary

It’s important to avoid the above accounting mistakes in order to set your business up for success. Neglecting or mismanaging your accounts can have serious consequences, so it’s best not to take any risks. Whilst it’s tempting to put accounting off until later, you need to make it a priority right from the very start. Good businesses and bad accounting just don’t go together.

Quick Ways to Improve Your Financial Performance

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If you want to improve the financial aspect of your business, start with smart changes that will bring you great results.

Even when a business is doing well, there’s always room for improvement. Especially if you want your company to make more money or have better cash flow.

Here are three quick ways to improve financial performance that apply to every company, big and small.

Rearrange Expenses

Some business owners start with the idea that their business needs to make more money to cover all expenses. But what if you reverse the order and see if you can reduce your expenses?

Perform an evaluation of your expenses and see if there are areas where your business is spending more than necessary. A couple of rearrangements could make a sizeable difference.

For example, you may want to negotiate with your suppliers to get a better deal. You could also switch your insurance company if another company offers the same level of coverage at a more reasonable price.

Finally, you could discuss a periodic payment plan for larger expenses to make it easier on your company’s finances.

Offer More Payment Methods

If you’re working directly with customers, you may offer additional payment options. Doing so may let you attract many more customers at the cost of a little work.

Everyone has a preferred payment method and if you don’t have that option available, they may move on or are at least less likely to buy repeatedly.

If you don’t have a webshop, you could upgrade your site to include one and have multiple payment methods available for customers. Besides credit and debit cards, some of the popular ones you can offer include PayPal, Skrill, Google Pay, etc.

Businesses that have broadened their accepted payment methods have mostly experienced an increase in sales and customer satisfaction.

Change Your Marketing Strategy

Many businesses are spending a lot of money on marketing. Having a marketing budget is fine, but if you’re not doing great, consider downsizing or trying something else.

Social networks and blogs are very powerful tools for building an audience that trusts you. It’s also a cheaper and faster channel to get your message across. Try it and you may realise that you could cut your marketing budget in half.

You don’t have to pay for ads, either. Instead, you only spend time creating content and engaging with the audience.

Building an organic presence on social media won’t happen overnight. But if you know what you’re doing or have someone on your staff that does, a month of constant work may be enough to get your foot in the door.

Smart Changes

If you want to improve your company’s financial performance, you don’t have to do anything drastic. Small and smart changes can already lead you to where you want to be.

Every business can rearrange its expenses, offer more payment options, and get the most out of social media.

Try using these strategies for a few months and you may be pleasantly surprised by the results.

Need a hand improving your financial performance? Get in touch today! www.sunnysideaccountancy.co.uk/contact/