Accelerate Blog Series #6: Dealing with Money
Hey everyone! 😊
Money is on the mind with this monthís ACCELERATE blog so letís look at finances, cash flow and the smartest ways to get best use of your precious capital.
Vehicles and equipment
Acquiring your equipment, insuring it and keeping it safe are all things youíll need to take into account. Starting with vehicles, you have to mainly consider fuel consumption and cubic space. Reliable brands such as Ford, Volkswagen and Vauxhall come with a recognised level of practicality.
Large courier vans can set you back £20,000+ VAT so the decision isnít one to be taken lightly, fortunately thereís ways to help you with your buying process.
Acquiring a bank loan can often be the best option, competitive interest rates mean your costs wonít skyrocket past the actual price of the vehicle. You also donít have to settle for your current banks offer, feel free to shop around.
The company that you purchase your vehicle from may also offer its own finance package which may come with insurance and maintenance policies, so could be advantageous.
While asking for payment can be a socially tricky topic with customers, you have to be assertive because late payment is the bane of so many small businesses every year. It is calculated that small and medium sized businesses are owed £63,881 on average in late payments. Adopting a good payment practice can help you avoid this.
ē Invoice ASAP
ē Calculate costs as you go
ē Invest in a card machine so customers can make card payments
ē Donít make mistakes on the invoice
Your invoice template is:
Business name, logo, registered address and company number Your clientís name and address (make sure the name quoted is the person paying)
Details of the service (or products) you have supplied
If applicable, a purchase order number or related reference
The amount due and the date it should be paid by
VAT details, if you are registered (remember to add 20% to the bill)
Donít let the invoice slip out of a customerís mind, an email reminder system will be useful and if you still havenít received payment donít be afraid to send a friendly letter.
Maintaining cashflow is tricky and through the peaks and troughs of a year you have to be able to balance whatís coming in and going out to maintain your profitability. To help with this, you should consider setting a forecast:
It makes life much easier when dealing with your finances if you know where all of your money is going over the next six months. Having a buffer of cash in your reserves (ideally three monthís salary) will allow you to weather any financial storms. Remember: celebrate the money when itís in your account and donít bank on potential numbers until they are banked!
With the information earlier and the technology mentioned in last monthís edition of the ACCELERATE blog series that financial question should become clearer. If you still have questions please get in touch with the homeservefoundation.com here