DO YOU NEED THE MONEY FOR THE CASH?
It’s that time of year again. Personal income and corporation tax demands Oh, and there’s a VAT bill to pay as well. Many business owners tell me ‘but I just don’t have the cash to pay…’. An accountant once told me ‘you should be happy paying tax – it means you’re making money’. Ermm, yes, up to a point…
Some years ago I was working with a financial services business and they faced a cash flow crisis. Well, actually a lack of cash flow crisis – yes, even the money men in suits aren’t always great at getting clients to pay, so you’re not alone! I spent a little time looking at their credit control procedures and remember a frustrated member of staff yelling down the phone to a customer ‘but I need the money for the cash!’ Out of the mouths of babes and innocents. Cash indeed is king.
You see, the tax man takes his cut not on the cash in your bank but on the invoices you’ve raised. So 20%, 30%, 40% of your ‘hard earned’ profit will be taken even if you’ve not collected it yet. Unfair, but that’s how it goes. And you know that you always pay your bills on time, even early to keep your suppliers sweet. You feel annoyed that your customers take their time. And a little nervous of chasing your own customers too hard as you don’t want to upset them. You’re the meat in the sandwich and the tax office shows you no mercy.
What if I told you how easy it is to unlock this puzzle?
Let me put it another way. Whatever it is your business does – maybe you design gardens or houses, make widgets, operate big cleaning contracts, run a legal practice or own a shop – I’ll bet you’re pretty good at it! Why? Because you’ve learned your craft over the years and made sure you offer the best service or product in the market in your chosen field – and have lots of customers who will testify to that fact. There’s probably some stuff you do which you think of as really easy – because you’ve done it so many times.
Thing is, you also have to run a business and all the challenges associated with it – the marketing, the sales, the admin….oh, and the finance stuff. And that’s where we come in because we’re actually very good at ‘the other stuff’ and improving cash flow is something we think of as being really easy….because we’ve done it so many times. Our customers regularly see their ‘receivables’ (a posh word for cash arriving into your business) double in a little as three months. Here’s what a couple of satisfied customers have said:-
“In pure cash terms, the last two months have produced gross receipts of £21,128 & £25,228 compared to an average of just £13,863 in the previous 3 months…thank you very much for all your input”
David Meredith, C R Busby & Co, Chartered Accountants
“Since embarking on your Business Advice Programme, I have transformed my business by taking several small steps that have led directly to a dramatic improvement in my cash flow, profitability and enjoyment of my work”
Mark Horner RIBA, Architect, Director of Mark Horner Ltd
What would you do with all that extra cash in your bank? Now that is a nice problem to have!