In difficult economic times, small businesses are usually the first to feel the strain. However, there are measures you can take to help protect your business. The best time to implement these measures is while trading is strong – prevention is better than a cure.
Management accounts
Accountants aren’t just there to help you comply with HMRC. Your accountant can employ a number of different strategies to ensure you protect your business, to help it reach its full potential. Management accounts can provide you with crucial information that you and your accountant can analyse to help assess where you are, where you want to be and how to get you there.
Cash-flow
Its a indisputable fact that in business, small to medium sized businesses are the most likely to encounter difficulties with their cash-flow. In order to prevent this, you could try implementing the following;
- Reduce debtor days on as many accounts as possible
- Accustom your customers to paying promptly
- Encourage use of card payments
- Consider using your business credit card to pay suppliers and make purchases
- Analyse your cash flow
Business credit reports
According to a report, one in five SMEs have found themselves in an unsavoury financial relationship because they failed to do their homework on prospective business partners. This You should always check the financial status of business partners and suppliers before signing contracts and doing business together. This is where business credit reports come in handy. Reports can provide information regarding a company’s finances, outstanding debts, county court judgement and the level of working capital they currently hold.
