Monday, 6 February 2017

Cash Flow is King

Whether you are in business or not, you’ll have heard the phrase ‘cash flow is king’, many times before. The saying has never been more true in this time of uncertainty when businesses of all shapes and sizes are just paused waiting to see what happens next This is making the mammoth task of  trying to balance the books even more difficult than usual.

One of the most difficult tasks any small business owner can face is how to chase up an overdue invoice. I say difficult because the SME has to navigate a tricky path between having their bill paid and not falling out with the customer. Here are some tips that will help any small business owner chase up overdue invoices:

Check payment runs - find out when customers make payment runs and what the cut off is. There’s no point in submitting the invoice on the 20th if the cut off for that month's payment run is the 19th!

Make it easy to pay – You should have a clear collection policy in place outlining credit terms, how you will collect money and any overdue payments.
Make invoices clear – having a good system in place to record invoices is key. There are many software packages available like Free Agent that our clients use that make it very easy for you to track payments. Remember also that, the last time a company can object to an invoice they receive is on the day they receive it. After that time, they cannot quibble and dispute it.       
Follow customer instructions – large companies in particular often have strict systems for paying. Maybe they want a special invoice number – so make one for them. Also, ensure that it’s consistent throughout your communications to avoid confusion.

Follow up promptly – Make sure you have a consistent collection procedure and always follow up as promptly as possible. Keep a close eye on patterns in which clients generally pay; and ask yourself whether this fits in with your billing cycle? If the client does not pay ten days after the invoice is due, send them a ten-day letter re-iterating the fact that the invoice is due and (politely!) asking for payment.

Be polite – Shouting threats is not going to do you, or your business, any favours. If all else fails, and the client is ignoring you, or refusing to pay the bill, then consider whether you really want their business in the future, and make a decision about whether or not it’s worthwhile to apply to a county court (used to be known as small claims court) to claim money you’re owed by a person or business. You can process a claim for money owed up to a value of £100,000 online. This covers most debts owed to SMEs; but if the debt exceeds this level, consult a solicitor. More information can be found at

Consider as well that the business could also be going through tough times, or they could be unhappy with the service you have provided. Either way, your main aim is make them pay their bill. Remember cash flow is king. 

This article appeared in Huddersfield Examiner, Kirklees Business News February Edition page 14 

Monday, 5 December 2016

"The rule is, jam to-morrow and jam yesterday – but never jam to-day.

Hammond and May - Image originally appeared in InAuto News

In a week that has seen Hammond and May for the first time on Amazon Prime video, the stage was set for an equally dramatic introduction – our new team’s first Autumn Statement!

When she stood outside Number 10 as our new Prime Minister, Mrs May promised Government policies that would help those who are “just about managing” and what emerged from Number 11 definitely showed some signs of that.

The popular headlines: Living Wage up, tax and NIC thresholds up, petrol duty frozen.  Then there is the change to the taper on Universal Tax credit changes so that families keep more of their credits as their income rises and the money that will be invested in building affordable homes and improving transport systems, which will additionally help to secure jobs in the long downtrodden construction industry.

It painted a picture of the UK as a good place to live and definitely open for business, confirming the cuts in the rates of corporation tax and promising more funding to Universities and for R&D.  Indeed, more cash will be available to finance everything from innovative businesses, via the British Business Bank, to improved mobile phone networks and internet infrastructure.

So, was it all good news from Hammond’s first rifle though the red dispatch boxes? 

To be fair, he was somewhat constrained by his predecessor’s previous decisions, by the Office for Budget Responsibility’s rather downbeat assessment of future economic performance and the ongoing lack of cash in the Government’s coffers.

But, no, not if you own a home or a car because you’ll be paying more for your insurance.  Not if you’re a landlord that will have to carry the costs of proving that your tenants are credit worthy and entitled to live in the UK.  Not if you’re an employer that will have to work out how to recover the rise in the Living Wage and the extra NIC costs of stopping employees giving up salary in return for benefits (except eco-friendly cars), as well as price rises on pretty much everything you buy as other employers to factor them in to their prices.  And if your business ends up struggling as a result of this, to add insult to injury you’ll now have to pay NICs on some redundancy payments.

To appease the nay-sayers in the British media who believe that big businesses (especially foreign ones) create losses just to avoid paying tax, the ability to offset tax losses against future profits will be restricted if those profits are more than £5m and the amount of interest over £2m that can be deducted will be limited.  Some might think it an interesting way to incentivise generating profits in the UK.
Chancellors have to work hard to find proverbial rabbits to pull from their hats in the Autumn.  The best Mr Hammond could do was make it an event that announced its own demise - his major surprise was the news that there will be no more Autumn Statements!

“And”, as Jeremy Clarkson might (now) say “on THAT terrible disappointment….”

This article was printed on December 5th in Huddersfield Examiner Kirklees Business News on page 14 - Titled Hammond and May

Monday, 7 November 2016

Keep you and your business fit!

One World Cup, two Olympics and 9 Triathlons later the BattleAxe (BA) still has a head full of sport and fitness.  A couple of weeks back she even demonstrated the art of sprinting over a tai-line to a certain Brownlee brother!

Hours of selfless training have given the BattleAxe opportunity to think about her clients’ fitness.   Not the two that swam the Channel, the personal trainers nor even the rugby league team but the fitness of businesses she attempts (tactfully!) to keep under control.

Her Training Elves weren’t sure if all the deep breathing was because she’d just cycled up Smithy Place or sighs of despair about how out of condition a lot of businesses are that she encounters every day.  They suspect the latter…something about her muttering “plan, do, measure, repeat!”

Uploading her training session onto Strava (or was it FreeAgent?) she continued to chunter about how too many businesses don’t seem to know from one month to the next what their targets are let alone whether they’ve met them.  Then there are those that collect lots of numbers but don’t understand what they are telling them (is that raised heart rate symptomatic of blocked arteries or have they just posted a personal best?) or think they can win the game just by watching the scoreboard.  Worse still are those going “I got distracted again and forgot to look at my split times - I was supposed to be going for speed and I ended up at comfortable jog pace.  Great if I want to do a marathon but not if I want a PB time on my 5K!”.

The Elves relaxed when, performance logged, the BA was back to working out what needed to be done on the next outing – which part of the course needs more practice (that bend in New Mill is a killer!), how many seconds need to be shaved off each lap to get to her desired overall time.  Then off to run it past her coach to make sure the plan is challenging enough.  Btw, she sometimes wishes he’d trained as an accountant, then she wouldn’t have to draw so many graphs to get him to understand what the numbers mean!

This week her bike is in for service and winter tyre fitting to minimise the risk of falling off in the wet weather then off to a dance class to make sure that not only is she rolling-pin fit (no dropping it at the handover!) but also agile enough to deal with unforeseen difficulties on the course.  The other Brownlee is role model here – imagine: finishing line in sight and you suddenly find you’re carrying your brother over it (even if “he ain’t heavy”)! It must have felt like pulling jobs forward when a customer cancels a major order at the last minute.

Thankfully the muttering about “jerks” turned out to relate to associated “cleans” – core muscles engaged and lift!  After all, it’s vital to have a properly strong foundation to build on! 

This article appeared in Huddersfield Examiner Kirklees Business News on 7th December 2016 on page 14 Titked Fighting Fit