Start the year as you mean to go on

There is no sign that 2012 will be more ‘credit worthy’ than 2011 was.

It is unlikely that the banks will be any more willing to lend money than they have been during 2011. The state owned banks in particular are struggling to make money and are fighting hard to strengthen their own balance sheets. To do this they are deciding to take on only that debt which is guaranteed. Consequently normal owner managed businesses will continue to find it hard to get financing from their banks.

This means that companies must do all they can to ensure that they are in control of their own destinies – particularly when it comes to money.

Here are some tips you can follow to ensure that you don’t have any financial surprises in the coming year:

1. Firstly, have a fully thought through cash flow forecast showing when you expect money in and out – including any larger fixed asset purchases you will need to make.

2. Secondly, assuming you are not a bank, give credit to your customers with care. Don’t give credit at all unless there is a clear business case for doing so. If that business case is there, check with credit vetting agencies that the customer is credit worthy. Once you have agreed the credit terms make sure you have them clearly laid out in your terms of business and on any invoices you send out. Finally, make sure you have rigorous debt collection procedures and FOLLOW THEM.

3. Watch your spending and ensure that you only spend where there is a business case for that spend. Questioning every £ that goes out of your business (and this means before an order is placed with a supplier not once the company is committed) will make a surprising  difference to your bank balance.

4. If you are making any large purchases think about the best time to make the spend. If you buy in haste you are likely to pay more than if you have time to make a considered purchase. You might also want to look at using HP or lease financing rather than using your working capital.

5. Keep bank fees down by prudent use of credit cards (always pay off the balance in full when it is due!) and by looking to pay, and be paid, in ways which are cheapest for your bank (and you) to process. This means use cheques only if strictly necessary and cash only as a last resort.

By being aware of your business finances and taking an active roll in managing them you can help ensure the financial health of your business.

Fiona 🙂


What do you resolve?

Once again it is that time of year when we all resolve to be better in the New Year.

Unfortunately, it is not the done thing to make resolutions for others – as Karen in Outnumbered tried to do – so I cannot resolve for my sons to keep their rooms tidy or to play on their computers less. So I will have to stick to resolutions for myself.

As with many of you top on my list is to get a bit more active and eat more healthily after the Christmas excesses. I would also like to budget better on a personal front and stop being tempted by sales and other tactics employed by shops to part us from our money.

On a business front I am going to try to blog more consistently – once every two weeks will be my target.

To be honest though, I think January is the worst time to make big promises to ourselves to change. The dark days and miserable weather are not conducive to positive thinking – and I certainly think winter is the worst time to try to lose weight.

So my advice to anyone who is thinking of giving themselves big challenges in 2012 is to make some small resolutions in January and then aim to start making any big changes in the spring.

I find that by saving big things to March/April the positivity induced by the lighter days and better weather helps to ensure my resolutions get off to the best possible start. I am not saying that I always keep on the right course, but I certainly stay in it longer than I would do if I started in January!

Good Luck

Fiona 🙂