By Angel Serrano, Director, Small Business Product
Tue Sep 26 2017
From start-ups to big companies, keeping tabs on the amount of cash moving in and out of your business can be one of the biggest headaches you’ll face.
As well as the security of knowing how your income and expenses are looking day-to-day, not having immediate access to funds can stunt growth and leave your business without enough money to fix unexpected problems.
So we’ve outlined seven ways you could start managing your cash flow today, in a way that could mean you don’t have to raise your prices or drive business to lower-cost competitors.
No matter what industry you’re in, it should be as easy as possible for your customers to pay you quickly.
So pick the payments systems that encourage your customers to speed up payments: paying by cheque or making cash deposits can mean several days’ delay before the money arrives safely in your bank account. Online and contactless payments are usually much quicker.
To reduce delays on money coming into your accounts, set your payment terms to suit your immediate needs – e.g. ask to be paid within 30 days, rather than 60 – and send out invoices as soon as possible.
You could also offer incentives for quick repayments, or track your customers’ payment habits so that your invoices match the days they’re most likely to pay.
The right business credit card can make all the difference to a growing business. It lets you easily manage costs with one statement, no matter how many cardholders there are, and it’s easier to set limits on spending by employees, so you have more control when planning your budget.
The security of a business credit card also gives you breathing space to pay suppliers, take on staff at short notice, plan new business enterprises or meet unexpected costs that inevitably come as you reach new markets.
Some cards also come with features and rewards, so make sure your business card has the right supporting tools for your enterprise, and speak to your business banking advisor about which card would be right for you.
See how a business credit card could help your business
A bad credit rating can make it much harder to get funding to expand or test new products and services. It can also stop you from getting the best deals on utilities and rent.
The right business credit card – separate from your personal finances and used in the right way – can be a smart step in establishing a history of making prompt payments.
Paying your business credit card each month shows your company’s creditworthiness to potential lenders, and increases your chances of securing financing at short notice. You should also make a point of paying all your invoices on time.
Most businesses borrow money at some point – and with reason. A short-term loan can help take your business to the next level: 64% of SMEs’ turnover would increase if they successfully secured the right loan, according to Barclays’ research1.
A business credit card can help you meet on-the-spot expenses, but a loan may be more suitable if you’re facing a hold ups with utilities, supplies or equipment, or you want to raise your operating costs to meet new business.
Earlier this year Barclays became the first UK bank to offer instant business lending via a mobile app, reducing the amount of time it may take to get a loan from a matter of weeks to a matter of hours . So shop around to see if a loan is the right option for your organisation.
Check out how a business loan can help you stay on top of your finances
You should always be ready for growth. Business is no longer a 9-to-5 process, so use tools that give you more control over your finances and spending when you’re short of time.
Finding ways you can monitor and control spending from any device, anytime, anywhere, could save your business time and money. For example, some payments providers let you collate all your billing and settlements in a single dashboard that you can integrate directly with your own systems.
Having a 24/7 awareness of your cash flow also builds good habits and processes with you and your teams, which could put you in a stronger position should your business, workforce and outgoings increase.
During periods of rapid growth you want to focus most of your resources to meeting increased demand and making sure your organisation is running smoothly. You probably won’t have time to be the expert in all areas of the business.
So find external partners who can help you. At Barclaycard we take the time to get to know your business inside out; we’ll advise you on how to manage your payments and security as you grow.
You should also automate things like purchase protection, fraud cover and travel insurance and getting the best deals on foreign exchanges. These are the sort of details that a good business credit card could cover, leaving you to focus on your staff, partners and customers.
See how a business credit card could help your business
A good credit card machine could help you lower processing costs, speed up payments and increase your profits – putting you in the strongest position possible if something unexpected hits.
Also make sure all your payment devices are set up to receive contactless payments. Retailers who accept contactless have seen their number of sales increase by around 30 per cent2.
But keep in mind that not all card machines are created equal. Whatever provider you use, make sure your machines are PCI (Payment Card Industry) compliant – this means that you’re less at risk of fraud or penalties if anything goes wrong.
See which card machines would suit your business
It can feel daunting to get on top of your cash flow, so speak to your banking advisor about how to plan your expenses and income to meet your business needs – and make sure you’re always prepared for the unexpected.
1You may still be subject to checks. Applications processed via telephone or branch may take longer to process than online banking or Barclays Mobile Banking.