Cash is the king when you talk business, not only to sustain but also to grow. Being an SME, you need to check your business expenses. A continuous check allows you to monitor money flow and eventually guides you to take the necessary steps.
I believe you are very much aware of the importance business expense management keeps, so let us have a look at some of the ways you can implement the same exceptionally:
1. Expecting the expected
Be it any business, getting paid soon after the sale is something every entrepreneur dreams about, but there’s a glitch. There are certain entrepreneurs, who keep dreaming about the pay on the long run (at times). You neither can predict the coming time nor the client’s financial stability at the time of delivering goods. However, there’s one thing you can do to improve the flow of money and that’s by managing the receivables.
Following are the ways:
- Invoice issue and timely follow-up if the payment gets slow
- Ask for credit checks at the initial stage for the new customers
- Don’t keep the outdated and old inventory until and unless you have plans to open a museum.
- Offer cash discounts to promote and motivate your clients for cash transactions.
2. Manage what goes out
Though for every enterprise managing expenses are important, but for an SME this is little more crucial. I’ve seen certain SMEs doing expenses including unnecessary marketing and promotion and consequently the money outflow turns to be more than the in-flow. For example: Unnecessarily develop an mobile app.
- Focus more on suppliers with flexible payment terms
- Gain the trust of suppliers through regular communication. This can be very helpful during financial instability.
- If the payment in due for 30 days, don’t make it in 15 days. You never know how the time responds in future.
- Early payment can be helpful if the supplier runs a discount program.
- Develop a mobile app if it really makes sense to your business. Think twice about the needs of mobile app for your business.
3. Call an expert
Accountants are a trustful resource for the entrepreneurs, since the days of the abacus. Respecting the fact that you wish to save “something” out of your well-deserved money by self, his deep knowledge of tax laws and handling the accounts related activities is always helpful.
With their good command over the field, they can simply find a way to save some extra penny for you through deductions and by keeping you penalty free. Not only these, but the accounts experts will always ensure that you have clean records throughout the year. The extra penny that you spend to hire the professional eventually yields you better profit and a calm mind.
4. An application to mobilize
By the time accountant looks after your money flow, you can consider having a mobile application in order to have a 24*7 check. Being an entrepreneur, you might not be able to find some extra dedicated time or might be busy traveling for your expansion. In such circumstances the mobile application allows you to check/track the accounts details. With this you can also have cross verification by the year end, making the final data more authentic and reliable.
5. Strategize to realize
There might come a time when you really need to think strong and make quick decisions. Let us take an example; one of your debtors is continuously making delayed payments. This is the time you either need to hold his credit facility until the time he clears the debts. Apart from this you can also consider some sort of mediation service or negotiate with part payments. With this, you can not only resolve disputes, but you can also save the expenses of going to court.
6. Track to trek
Standing last on our list is the most important point. Irrespective of your busy schedule or anything of the kind, ensure you are continuously tracking the money flow. With this, you’ll be always updated about the funds you have and those you need to recover. By watching out for the transactions, you can further ease your decision making and can prevent yourself from the inconsistent financial instabilities.
As an entrepreneur, it is important for you to keep a proper check on the business expense management. Monitor the cash flow and ensure that you always cross verify the final data. Managing expense might be a two-word term, but if formulated in the right way, the above-mentioned ways can help you and your enterprise over the long run in both sustaining and growing.Business & Finance Articles on Business 2 Community