A new year is upon us, and that usually means many individuals will be setting all manner of New Year’s Resolutions. You probably have a personal resolution you’re working towards, but as a business owner, have you ever thought about how effective it would be to have a business-related resolution too? You could have a genuinely profound effect on your business’ start to 2019, if you set a realistic business resolution.
A New Year’s business resolution we’d suggest you try and stick to is getting your finances sorted for 2019 right now. The team here at Ping Finance have put together some of our top tips to ensure your business gets off to the right start in 2019, by getting your finances sorted.
Check Over Your Expenses
The first place to start when trying to get your finances sorted for the new year should always be checking over your direct debits and regular outgoings. You’d be surprised just how many businesses don’t check over their expenses regularly, and this can prove costly in the long run. This is especially important for small businesses, as in many cases, every penny counts.
Think of it from a personal point of view – you wouldn’t keep paying £40 a month for that gym membership you haven’t used for 6 months, would you?
Start off 2019 right by going through all of your business expenses with a fine-toothcomb. A few of our main suggestions would be to:
- Check how much money you have spent on consumables such as energy throughout the last 12 months. You will find it extremely easy to shop around a little and find a much cheaper provider.
- Identify when your business is selling most of its products or services and try and coincide the timing of your stock purchases with these higher cash flow periods. This will lead to less surplus stock sitting around collecting dust throughout the year and can significantly reduce your storage costs if you are using an external storage solution.
- Review your supplier’s cost for the last 12 months; it’s always good to have a shop around and see if you can find a better deal. It’s also worth bearing in mind that your supplier may be open to offering a discounted price for the forthcoming year for your continued custom.
Recover Any Outstanding Debts
Recovering any outstanding debt is a great way to ensure your finances are in order for the forthcoming year; think of this process as starting 2019 with a completely clean slate. This can be hard work, especially if you have a lot of debtors, but it’s definitely worth your time and effort.
Before selling any products or services, you should always make sure you have a condition of sale agreement that is in writing, which outlines your terms and conditions. We’d also suggest including how long your debtors have to settle any debt and any additional charges which will be applied for overdue payments.
You could also opt to hire an invoice finance company to ensure you have no cash flow problems throughout 2019. Waiting for an invoice to be paid can cause real issues for smaller businesses, so investing in a company that can provide invoice financing is an extremely smart move. Invoice finance couldn’t be easier to do either; all you need to do is raise your invoice as usual, send it to your customer and then share the information with your lender, and they will advance between 60% and 90% of the invoice total within 24 hours. Once the invoice has been paid, the advance payment is repaid to the company and the balance is made available to you, minus any fees.
If your business has any outstanding debts, or ongoing payments which need to be made, it’s worth checking to see if there is any way you can combine these into a low interest and low fee product. We’d suggest shopping around to see if you can get a lower interest deal with another provider. Keeping a close eye on any low interest payment plans on an ongoing basis is a fantastic way to keep your outgoings as small as possible.
Having all of your debts in one easy-to-manage payment plan ensures you can keep an eye on your debts with absolute ease.
Build an Emergency Fund
Ensuring you have a sizeable amount of cash to fall back on should any problems arise is extremely important for any business, but this is especially true for new or smaller businesses. Keeping aside funds for a rainy day is advisable, in case your business doesn’t perform as well as you’d forecasted, or for any unforeseen eventualities such as cash flow problems or unexpected costs on broken down technology.
Just as you would keep an emergency fund in your personal finances, we cannot stress enough the importance of keeping some money set aside for those unexpected business costs. Having funds to fall back on can be the difference between a business continuing to thrive and the worst-case scenario, going out of business altogether.
We hope you found these tips on how to get your finances in orders in 2019 useful. By kicking off 2019 in the right way, you can rest assured that you are giving your business the very best chance of succeeding this year. Be sure to check in on our blog page throughout the month for more tips on how to best manage your finances throughout the new year.