Where Do You Need To Spend Money In Business?

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StrategyDriven Managing Your Finances Article | Where Do You Need To Spend Money In Business?No matter how good an idea you might have is or how excited you are to be your own boss, the truth is (and it’s a truth all entrepreneurs must remember) it’s hard to start a business. Over fifty percent of new businesses fail within the first five years, which may not be a pleasant thing to consider but it is a crucial one. It means you have to get things right from the beginning, if you’re to stand any chance of making it. Part of your success will be due to smart planning and investment – whatever money you have to start your business with, even if it isn’t much, must be used properly. Here are some ideas for the most important areas of your business to invest in.

Marketing

If you ignore marketing, no one will know your company exists. This is why it’s essential not to cut corners or compromise on this aspect of your company growth – don’t try to do it yourself or hire a friend who is competent enough but not outstanding and who doesn’t really understand how digital advertising in 2021 works. What you must keep in mind is that effective marketing — marketing that succeeds – may not be cheap, but if you invest in quality, you’ll soon be making much more than you spent for it.

It is critical to understand your target audience and tailor your advertising and marketing to them, which means you and the company you choose to manage your marketing for you will need to do significant research ahead of time. If you do this correctly, your marketing money will go a lot further.

Security

If you run a business, your website is likely to produce a significant part of your revenue. Even if you don’t sell goods directly via your site, it’s still the main way for potential consumers to contact you and find out more about you, so it must be safe and secure.

Those who want to use your website must be confident that their information is safe (particularly if they give you payment details). Keeping your website secure is something that every business must invest in. If you don’t invest in this area of your business, you could be hacked and cybercrime is expensive to put right. It might even cost you your business.

Technology

Technology is essential in business, and the need to be at the forefront of any new trends is becoming more and more crucial year after year. If you want to get ahead of the competition, one way to do so is to invest in cutting-edge technology. This will improve your reputation by showing that you are on top of things, and it will also help your customers and clients by making it much easier for them to use your services.

Instant messaging platforms, content management systems, automation, and even artificial intelligence can all be useful in your company’s day-to-day operations. However, you must be careful not to overspend, otherwise you may end up squandering money on technology that will never work for you. If you are thinking about automating your business you should look into what is RPA? Also known as robotic process automation, this technology can really help to boost your business and help with the running of your daily tasks.

Why Traditional Invoicing Is a Bottleneck: Do These 4 Things to Remedy It

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StrategyDriven Managing Your Finances Article | Why Traditional Invoicing Is a Bottleneck: Do These 4 Things to Remedy ItThe accounts receivable departments must process incoming payments every day and keep financial records up to date. Unfortunately, some companies do not complete these tasks on a daily basis and create bottlenecks. The processes could lead to longer waits for profits, and some companies cannot wait that long.

By following better practices, the business owners can avoid bottlenecks and keep their cash flow coming each day. Several common mistakes made by AP departments can also create further unnecessary complexities.

1. Try An Invoicing Service

Many companies face difficulties with managing all invoices for their customers, and they often turn over some accounts to service providers that help the company collect the overdue balances. Unfortunately, many collection agencies use tactics that do not get the job done and alienate the customers. Even the best customer the company has could face circumstances that cause them to miss a payment, but this doesn’t mean they deserve to constantly get harassing phone calls.

Instead of using these more traditional tactics, many companies are using less invasive practices to give customers a more convenient opportunity to pay their outstanding balance without calling the company to complete the payment. These methods could allow the customer to follow a link in an email from the company that guides them through a more convenient payment process.

The collection efforts won’t interfere with the customer’s personal life or make them feel overwhelmed. The service provider sets up a link that redirects them to an online payment solution and the process is quite simple. Business owners can learn more about using instant invoices by contacting a service provider now.

2. Speed Up Invoice Processing 

Another issue that many companies face is a failure to process and send out the invoices. Companies may have a larger collection of clients and invoicing is a major task for the AP department. This could become a serious issue for the company and prevent cash flow from coming in on time. Some companies pick a specific day of the month to print a huge collection of invoices instead of processing an invoice immediately. Customers that don’t know how much they owe the company cannot send in a payment and update their account. They need an invoice right now.

In turn, the AP department becomes overwhelmed with the number of invoices they must send out at the end of a week or month. These slower processes just delay the payment process and make the company wait longer to get their payments from customers. If the company implements practices that invoice the customer immediately and sends out the invoice, the company receives more payments throughout the month and eliminates common cash flow problems.

3. Analyze Customer Payment Habits

Companies must also analyze their customers’ payment habits, and they must determine when it is time to let certain customers go. A customer with a persistent history of tardy payments isn’t just hurting their own credit or making themselves unworthy of using credit. They are also slowing down the business and preventing the business from collecting the money they are owed by the customer.

By using data mining practices, the company can generate reports that show them which customers are late with their payments and which customers have a history of getting late charges. While companies do not want to discourage customers from buying their products or hiring them for their services, there comes a time when some customers becomd a major problem for businesses and delays the time it takes to get their profits.

Customers that never pay their payments on time create more of a problem for the business than letting the customers go. For example, if the company allows customers to buy products and pay later, the customer must pay later and settle their debt to the company. However, if the same customer is late persistently, they are not a valuable customer and are simply making it more difficult for the company to operate. It’s time to let them go by blocking their account.

4. Ensure Access for Workers Who Need the Information

Another major dilemma with companies that use outsourced customer service or collection services is that they don’t have the information available. All workers who will manage customer accounts need access to the customer files. If they cannot open a customer’s account and review the data, the workers cannot accept and process customer payments.

The business owner will need to review all connections to their database to ensure that the workers have the correct credentials for the task. Customers do not want to call in to make a payment and face one or more transfers to other departments. This takes up the customer’s time, and it will discourage them from doing business with the company. Companies that have automated systems must streamline these processes to ensure that customers’ payments are accepted and processed immediately.

By invoicing immediately after the service or order, the company can also make it possible for the customer service representatives to find the outstanding balance. If the invoices haven’t been processed, they will not show up in the system. This could lead to customers facing delays that are not convenient for them and make them want to get the same services or products somewhere else.

Accounts receivable departments must take on the task of collecting all outstanding payments for the company, and they must follow more streamlined processes. For many companies, slowdowns in invoicing make it difficult for them to collect the customers’ payments in a timely manner. Some companies do not have the time or resources to process invoices only once a month, and the process could prevent access to high volume of capital that they need during the month.

When reviewing strategies for processing invoices, the companies could find a more efficient option that makes it easier to collect now. By using immediate invoices with a direct link to the payment system, they can collect the money faster and update the customer’s files instantly.

Financial Tips For Businesses In 2021

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StrategyDriven Managing Your Finances Article |Financial Tips|Financial Tips For Businesses In 2021As a business owner, it is always important to be intelligent with your finances in order to maximize your bottom line. For many, 2021 is when financial intelligence and careful management are critical with many companies struggling due to COVID-19. The businesses that manage to succeed and come out the other side in a strong position will be those that are intelligent with finances during this time, so what are a few helpful financial tips for businesses that can help right now? Keep reading for a few tips that will hopefully help to improve your company’s financial health in 2021.

Go Through Regular Expenses

One of the first steps to take is to go through all of your regular expenses and to see if you could either cut out the expense or make savings by changing. Keep in mind that cuts and changes could make work harder for staff and/or impact the quality of the product/service you provide, so it is important that you make intelligent cuts and changes that won’t negatively affect the business.

Outsource To Address Staffing Issues

If you find yourself with staffing issues during COVID-19 (like many), it can be hard to know what to do. Hiring new staff can be a huge expense, so instead, a good alternative is to outsource aspects of your operation to specialists. This can lighten the load for your existing staff and ensure that the work is being completed by a specialist without paying expensive employee costs.

Embrace Remote Work

Most businesses have had to experiment with remote work during the pandemic, and many have found that it benefits all parties. One of the main ways it benefits the business is that it helps reduce costs, and you could even downsize or go without a central office once the lease expires to free up a huge amount of money.

Sell Unused Equipment/Buy Second Hand

If you have any equipment that you no longer need, you could look to sell this to raise some extra cash. Alternatively, if you need new equipment for your business but don’t want to spend a fortune on new equipment, you could look to buy second hand. This is a smart way to keep costs down while making key improvements to your business – click here to find more about selling and buying used equipment for your business.

Look Into Solar Power

The world is becoming greener, and every business should be taking action to reduce its environmental impact. One of the most effective ways that you can do this is by switching to solar power, which will not only greatly reduce your environmental impact but also help you to make huge long-term savings. The upfront costs can be high, but ultimately this will prove to be a smart financial investment and help you improve your green credentials in a time when today’s consumer is selective and eco-aware.

Take Out A Loan If You Need It

Many businesses owners are reluctant to take out a loan, but it can actually be incredibly useful and help companies to manage during challenging periods or to cover growth plans (such as the cost of solar panel installation). There are lots of different options in terms of types of loans, so it is important to research each one and find the right type for your business and needs.

Negotiate With Vendors

You might also find that now is a smart time to negotiate with vendors. The pandemic has affected every person and business in different ways, so you might find that they are willing to renegotiate terms and rates that could help you to free up costs. Additionally, if you are coming to the end of your contract, it is worth exploring your options.

Invest In The New Normal

It is also important to realize that things will not simply be “business as usual” and that some changes are here to stay. This means that it is important to invest in the new normal and to adapt your business so that you can thrive in a post-pandemic marketplace, which might include contactless technologies, remote work tools, online services, and more.

Hopefully, these financial tips will come in handy and help you to make smart financial decisions during this challenging time and come out the other side in a strong position to find post-pandemic success. It’s not going to be easy to succeed in this industry due to the effects of the ongoing pandemic, yet these tips can help make it more manageable.

Unexpected Costs of Running a Small Business

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StrategyDriven Managing Your Finances Article |Small Business Costs| Unexpected Costs of Running a Small BusinessRunning a small business may seem easy to do on paper, but there really are so many other things that you need to think about. One of them is unexpected expenses because this can easily be the downfall of your business.

Extra Office Space

Sure, a home office may work for your small business, but zoning and other related regulations may require you to have something a bit more official. When making the decision to rent or purchase a property, you need to think about how much space you have now and how much you actually need. A lot of companies will offer you temporary office space, which is great if you are not quite sure which direction you need to take your business in, or even the arrangements that you are going to have. Utility costs can also eat away at your budget. Leased spaces will often include these types of costs as part of your agreement too, so look into those and always make sure that you are getting the best deal.

Equipment and Maintenance

The tools that you need to run your business need to be maintained. You may also need to pay out for equipment you didn’t think you’d’ need, such as a scanner, copier or even a shredder. Stationary should also be included in your budget because this can also eat away at your money more than you realise. If you want to save money here, then consider buying equipment second-hand from a range of auction sites. You should also buy stationery or any other related equipment in bulk, as this will help you to cut down on the cost per item.

Employees

Salaries, medical leave, health insurance and even training can factor in a large amount of cost for your budget. If you fail to invest in your employees by providing them with a reasonable wage or even a clean office environment then they will leave and this will cost you even more in the long-run. The cost of replacing an employee can be extortionate depending on the avenues you need to go through, so make sure that you set aside a good amount of your budget to accommodate this.

StrategyDriven Managing Your Finances Article |Small Business Costs| Unexpected Costs of Running a Small BusinessSecurity

If your business is not secure then you will be putting it at risk. It doesn’t cost a lot to invest in
CCTV installation, but you would be surprised at how much it could help you to prevent break-ins. You should also focus on securing your network as well. This can be done through encryption, which will cost you, but it is most certainly a worthwhile investment.

Shrinkage

Shrinkage refers to inventory loss at some point between the purchase you make for the items and the sale you make to your customers. Shrinkage can occur through vendors not shipping the required total of products, couriers losing packages or even poor inventory management. This expense can be entirely prevented by being diligent and by also making sure that you document and process every single step of the shipment until it reaches your customer.

7 Great Tips on How To Fund Your Business

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StrategyDriven Managing Your Finances Article |Fund your business|7 Great Tips on How To Fund Your BusinessThe first thing that comes to one’s mind when deciding to start a business is, of course, the funding. Whether it’s capital to start the business or funds to run the business operations- you need M.O.N.EY!

The cost of doing business can get steep quickly, so the smart thing to do is start with as much money in your bank account as possible. But even if you don’t have much money in the bank, there are still tons of places to source from.

What Types of Funding Are Available?

Once you’ve decided what type of funding is right for you, the next step is deciding where you’ll get the funds. Again, it’s good to have several funding options so that you can compare the terms and conditions of each.
If you are short of cash for the business, then you’ll need to borrow it. Or maybe source money from friends and family or even apply for a grant. The type of funding for you depends on what you need, where it will come from, and how fast you need it.

Personal Savings

One popular way to fund your business is through your savings. Before you venture into a business, you can start by saving towards it. You can tap into your savings account if you’re starting a new small business or use the money to invest in an existing enterprise.

A Business Loan

A business loan is a good option if you’re looking for startup capital or paying off other debt that you owe. If you decide to pursue this path, you might wonder, How do business loans work? The money comes from a bank or alternative lender in cash, equipment, or different types of collateral. Some lenders will even give you a loan to help you become more profitable or buy inventory.

Most business loans come with some interest. The interest will vary depending on the lender. The trick with these business loans is to clear the loan as fast as possible to avoid high-interest rates.

Business Line of Credit

A business line of credit is a revolving credit card that you repeatedly use as long as you have the money in your account to pay back each time. It’s perfect for ongoing expenses, such as utility bills and insurance, that you have to pay even when cash is tight.

Asset-Based Loans

You might also apply for an asset-based loan, which puts equity from your business up as collateral for the loan. For example, if your company owns a car, equipment, or property that secures the debt, it could be better than a traditional loan because you won’t have to pay as much in interest, and it could even help you avoid bankruptcy.

Talk to Friends and Family

If the money you need is relatively small, perhaps $5,000 or less, a friend or family member might be willing to give you a loan with no interest or repayment schedule. This type of funding is a gift because there’s no expectation that you’ll pay it back. It’s an excellent option for cash emergencies when you don’t have the time or resources to find other funding sources, but make sure you’re not taking advantage of someone who can’t afford to give you a loan.

Crowdfunding

One more form of funding that’s becoming popular is crowdfunding—individuals can now fund projects through money-raising websites and apps. You’re not getting a loan with crowdfunding. Instead, you’re raising funds to launch your business or fund a specific project, such as manufacturing and selling your product.

Apply for Grants

If your business is in a field related to caring for the environment, improving technology, or providing social benefits, you may be eligible for funding from government sources. There are grants available on federal and state levels that can help small businesses get started or grow.

To Sum It All Up

There is no need to stress about business funding. There are tons of options to pursue when exploring financing for your business.