What to do when things get tight
There’s obviously a lot going on at the moment in terms of the markets and how this downturn is going to hit some small businesses. It may seem like a momentous leap – from Wall St to your small business – but the ethos remains the same, how do you protect your assets, your business and most importantly, your cash.
Accounting software such as Xero is there to help in the leaner times as well as the good..
Here’s some ideas on what you can do.
- Process your bank transactions daily to see what your available balance is, if you have excess funds then you may want to transfer money to a higher earning interest account. You’ll then know exactly who owes you money.
- Keep on top of your debtors – make sure that people are paying you. You can check away from the office on your mobile device (m.xero.com).
- Send a statement if some debtors are falling behind.
- Be aware if anyone one large debtor creates a disproportionate exposure .
- Tighten up your expenses – identify expenses that are unnecessary and costly. Keep a close eye on travel especially.
- Monitor your staff’s expense claims. It might be useful to send an email around your team to clarify your policy around expenses.
- Enter your Budget and use the Budget Variance report to see how your expenses are tracking against the actual budget – and whether you need to re-evaluate what you’re spending.
- Invoice as soon as you have completed a job rather than waiting unto the end of the month. You can change your payment terms to be pay on invoice.
- Prepare your management reports each month and send them to your bank manager so they can see you’re on top of your financials.