With talk of an economic recession looming, now’s a good time to ensure your business is adequately prepared to weather any incoming economic storms and get ready for a recession.
“The number one best thing you can do for your business right now is to ensure you have strong cashflow” says Kiwitax business advisor Emma Lowe.
Emma works with business owners offering Kiwitax’s Business Improvement services. From producing cashflow forecasts to quarterly cashflow coaching sessions, each business gets something tailor made for them and their situation.
“Business owners can do this themselves,” says Emma. “But often they want someone external to the business to provide an objective viewpoint and some accountability.”
The Kiwitax cashflow management course focusses on seven key areas to improve cashflow;
Accounts Receivable (Debtors)
Make sure you are getting paid. Outstanding unpaid invoices are like cancer on your cashflow, you’ve done the work which has cost you, then you have to chase payment which costs you even more. We go into detail about effective debtor management in this article.
Accounts Payable (Creditors)
Ensure you are getting the best deal from your suppliers. 30-day terms or prompt payment discounts can both help from a cashflow perspective. Remember, it’s in your suppliers best interests for your business to be in a strong position too. Sometimes all it takes is a chat with them.
Inventory
Holding too much stock on hand or sitting on too many unbilled jobs is another area killing your cashflow. Review your systems and processes and see if you can manage better efficiencies. There’s loads of software options to help keep you on top of inventory.
Capital Structure, Debt and Tax
Business finance can be a daunting area for small business owners to navigate, that’s where your accountant can help. Ensure you don’t have too many obligations eating up your cashflow such as debt or tax repayments. Some debt is OK, too much debt can be fatal. Checkout our in-depth finance article here.
Overheads
You should be reviewing your overheads regularly anyway, right? Right? Now is a good time to produce a budget and hold yourself to it. How has your business changed over the last few years, and how can you take advantage of that? Do your customers expect to engage with you digitally, do you still need a physical shopfront? Asking the big questions can have significant effects on a businesses overheads.
Gross Profit Margins
With recent inflationary pressure pushing up prices, chances are some of your suppliers have put up their pricing, directly reducing your margins. You may have also been so busy that you have overlooked some of the less efficient ways you have been working. You can improve your gross profit margins by reducing waste, increasing efficiencies, and even raising your prices.
Sales and Marketing
Now is the time to ensure your sales and marketing machine is well oiled and producing adequate sales numbers. Track your key metrics to ensure you attract, convert, and retain enough clients to keep your business humming.
Getting Help
While this article provides you with a high-level overview of the seven ways you can improve your businesses cashflow yourself, Kiwitax offer a practical, applied cashflow management course to help you.
With ongoing support from our business advisors, delivered in person (in our Napier office) over the phone or online, you will develop a program to help keep your businesses moving forward through any economic downturn.
Please get in touch if you would like to discuss how this course might work for you and your business.
About Kiwitax – Award winning business improvement, tax and accounting service
Here’s the thing. As a business, rental property owner or start-up, you get a kick out of having your own gig. But chances are dealing with your tax and accounting leaves you cold. Good news! We love it, so hand it over to Kiwitax and we’ll look after it all for you.
Whether you deal with us online, by phone or drop into our Napier office, you’ll find a friendly, professional hardworking team ready to work with you, however you keep track of your financial information and from wherever you do business. And all for a fixed price. It takes just two minutes to get a quote.
Plus, if you’re at a loss to know how to improve aspects of your business – from growth planning to cashflow management, even tax debt and so much more – we’re all over that too. Our Business Improvement advisors can help you make a plan and put it into action.
Kiwitax are a preferred training provider for Business Improvement services through the Regional Business Partner Network Capability Voucher Scheme. This is a government funded scheme designed to boost business capability by providing funding of up to 50% of approved training programs with specified training providers up to a maximum value of $5000.
If you liked this article and want to make improvements in your business, with quarterly coaching sessions specifically tailored to support you to identify and achieve your business goals, lets chat!
