In many countries all over the world, small businesses are crucial to the economy. That is more prevalent now than ever in the wake of the COVID-19 crisis. Now that lockdown measures have been lifted and businesses throughout the UK are reopening, many small to medium businesses are struggling with their cash flow. Studies show that a large percentage of small businesses end up closing their doors after just a few years of operation. When unexpected external problems happen, they typically don’t have the cash they need to make up for the unexpected losses and they need external help to manage their finances. This is where accountants for small businesses in London can be especially useful.
Having said that, let’s take a look at some ways that small to medium and enterprise level businesses can manage their finances more effectively in today’s post- COVID-19 world. Let’s get started:
5 Tips To Managing Your Small Business Finances
Speed Up Receipt Of Cash- sluggish cash flow can hurt many small businesses, especially if they don’t have enough cash reserves to operate. It’s important for any business to send out invoices immediately and shorten payment terms. Offer small discounts if certain customers are willing to pay early and always be ahead of the agreed schedule to further speed up payments.
Maximise Earning From Sales- updating your pricing structure regularly is a good way to maximise your earnings without selling more products. Your prices should always match your target profit margins.
Slow Down Outgoing Cash- businesses can maintain a steady cash flow just by slowing down their outgoing cash. You can do this by using low-interest business credit cards to pay for supplies and equipment.
Control Spending- every business should perform regular financial evaluations to look for any possible ways to reduce their overhead. Use less paper, rely on digital documents, reuse, and repurpose items, negotiate for discounts and ask for extended payment terms.
Hire An Accountant- accountants for small businesses in London can help your small business maintain control over your finances and forecast future profits to ensure long term sustainability and growth.
To learn more about managing your small business finances, contact Fortuous today and speak with an experienced London accountant who can answer any questions you might have. Be sure to click this link to Get An Instant Quote today!
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