Why keep filling a leaky bucket, when you can fix the holes?
Whilst the focus for many businesses is on increasing sales when looking to increase profits and improve cash flow, reducing costs is often overlooked and can invariably have the same impact to your cash flow as increasing sales by 10%.
Managing and monitoring your purchasing activity could be incredibly beneficial to your business, you need to get to grips with cash management and understand where you are before you can start improving things.
Make it simple for people to pay you
Millions of Britain’s small businesses still do not accept card payments, despite the UK rapidly becoming a nation of card-only shoppers, meaning small companies could be missing out on millions of pounds’ worth of business by not offering card payment facilities. Imagine what the impact would have been to UK businesses and the economy had those transactions taken place.
Taking card payments is not only beneficial for small businesses and the UK economy but also for your customers as it provides them with convenience and protection that a credit card offers them on higher-value purchases. By encouraging the use of payment cards, you will receive your money from sales within 36hrs straight into your bank account without the need of handling cheques and make cash deposits, all of which cost your business money.
Cheques as a form of payment date back to the 16th century and remain vital to some customers, particularly the elderly, but cheques cost banks around £1 each to process — four times as much as electronic payments. More payments are now made each year via online and mobile methods such as PayPal, Apple Pay, Google Pay, and Samsung Pay than by cheque. Plus, around one in five business bank accounts now charge companies to deposit cheques into an ATM, billing them at around 35p a time.
Analyse your cash flow, some card payment providers such as NetPay offer online reporting, allowing you to view the transactions within your stores and online. Many businesses go through cyclical highs and lows, clothing and toy retailers, for example, have their best months in December. This information allows you to track in-store trends and can be used in ways such as timing your borrowing, arranging the right amount of staffing, and boosting your marketing efforts during quiet times.
4 ways to fix a leaky bucket