Inefficiencies can be found in every business. Yes, even yours. How efficient are your processes, for example? Or is there an aspect of your business that you could automate?
You may think that you don’t have time for this kind of introspection, but by reflecting on your business, you can make small improvements that could save time and money. Here, we take a look at the key areas that business owners should focus on to help you avoid waste and maximise profit.
Cash flow management can make or break a business. You can have a profitable business, but if you’re not getting enough cash in at the right time, don’t expect your business to survive.
We would always advise businesses to make their invoicing and credit control processes as efficient as possible. You want to make it easy for your customers to pay you and you don’t want to spend lots of time chasing payments.
Double check your invoices to make sure they clearly display all the information your customer needs to pay you, including your payment terms. You could also try offering settlement discounts or charging late payment fees.
You could even automate the credit control process. Plenty of cloud accounting packages, such as Xero, allow you to send automatic reminder emails to debtors.
While you’re examining your credit control, take a look at your other processes too. And make sure you map them out, as doing so can help you to easily identify inefficiencies in your business. You may find there’s a task that’s being duplicated unnecessarily or that a particular process doesn’t take as long as it used to.
Keeping a process log can also help with recruitment or sickness absence, where you need to quickly get someone up to speed with a new process.
Interrogate every penny
As accountants, we like to scrutinise a business’ finances. As the saying goes – look after the pennies and the pounds will look after themselves; and as a business owner, it’s good practice to undertake regular spending reviews.
Take a look at recurring payments – do you still need that trade subscription? Can you squeeze your supply chain? Can you get a better deal with your current suppliers, or is it time to shop around? Could you even save time and reduce client travel expenses by using video software?
When it comes to managing your business, a cloud accounting package could transform your operations. The right accounting software will not only save time spent on admin, but it will also give you real-time information to help you make better-informed business decisions.
If you’re a goods-based business, take a look at stock control and flush out any inefficiencies. Again, having the right systems in place is key and when your online accounting software integrates with stock control and POS systems, this can make things a lot easier.
Data can determine whether you’re holding too much stock, or too little. You may think that holding too much stock isn’t necessarily a problem, but why should you carry the cost of warehousing on behalf of your suppliers?
As accountants, we want to make sure that your business is operating in the most tax-efficient way possible. There are plenty of reasons you could be paying more than your fair share of tax, for example, your business could have the wrong structure, or maybe you’re not making the most of your allowances.
It’s our job to find those inefficiencies and to remove them. Talk to us about tax planning and we’ll help you take home more of the money you’ve worked hard for.
Let us help you improve your business. Contact your local Champion Accountants office today in Manchester, Preston, Blackpool or Chester.