Article provided by Xero
Getting too embroiled in day-to-day work could harm your firm’s development, warns Gary Turner, managing director EMEA, Xero. Here, he provides tips on strategic time management, keeping on top of invoicing, and making the most of cloud technology.
As a small business owner, your time is either spent managing the business or carrying out the work. Yet, in order to grow from a small outfit to a successful, profitable company, your goal should be to spend all your time managing your business.
Ultimately, this will see you make the transition from owner-worker to managing director or chief executive officer in the true sense of the role.
Here are a few ideas to help you make the transition:
- Hold regular meetings with senior stakeholders and treat them like board meetings. Twice a month gives you the best chance of discussing current issues, progress, and ideas to boost sales. As a minimum, these should be quarterly meetings. It’s also a good forum for sharing and developing ideas. Consider including someone from your team to help action decisions and, if possible, involve a director or advisor with expertise in an area where you are not especially strong.
- Good small business accountants are so much more than end-of-year number crunchers. Today, they understand the importance of providing strategic advice on a regular basis, so make sure you consult them about any important issues or decisions. This discussion could happen over the phone, or on Google Hangouts, with both of you looking at the books at the same time over the internet.
- Carry out regular reporting. This should cover all key financial data. If you already have a strategic plan, compare your actual results to your budget. This can serve to highlight issues such as unnecessary expenses or under-performing areas of the business that you may not have been aware of and need to address.
With deadlines looming or customers demanding attention, taking time out to make strategic decisions isn’t the only important activity that can suffer. Essential finance admin can also fall by the wayside, especially if you are too small to have a dedicated finance person. However, as many small firms have discovered, cash availability can literally be make or break, with too many late payments culminating in debt and even closure.
Better cash collection can help reduce debt and therefore the amount of interest the business needs to pay. Likewise, owners have more money to invest back in their business to buy equipment, improve processes, or expand operations – so it’s definitely time well spent!
Consider the following tips to help improve your chances of getting paid on time and increasing cash flow:
- Discuss payment terms upfront – this sets the client’s expectations around payment before you start the work.
- Keep detailed records of inventory and time – as well as making sure you don’t miss anything when the time comes to invoice, this will also alert you if anything is going over budget so you can let your client know ahead of time.
- Make the invoice clear. Write in a way that makes sense to the client to avoid questions leading to a delay in them making payment. Ensure your bank details are on the invoice so you can be paid.
- Keep on top of debtors. When things become overdue, send regular reminders.
Rather than having to travel to the shop, office or home PC to keep an eye on over-due accounts or issue invoices, this can now all be done using a smartphone. This means time spent waiting in airports, on trains or between appointments can be utilised, rather than wasted.
Cloud technology can also save time in other ways too: rather than face-to-face meetings, it can be more cost-effective and convenient to use Skype or Google Hangouts. Likewise, remote working software also makes it easier to work from home or outside of nine-to-five hours, giving you the opportunity to improve your work-life balance.