While it’s more common to associate cash flow issues with SMEs, the juggling act between outgoing and incoming funds is a constant for everyone in business.

This is illustrated by the latest Deloitte CFO Survey, which claimed a move towards more defensive strategies for 2016 had made increasing cash flow one of the top three priorities for more than a third of large corporates. Our customers agree and have requested more and easier ways to manager their cash flow with our software solutions. Check out new Sage 200 Extra offering a great new way to integrate your solutions.

Given that any shortfall in outgoing and incoming funds can threaten your company’s existence, it’s crucial to know how to go about making savings during a tricky period. And – looking at the bigger picture – streamlining your business is simply good practice, paving the way for expansion opportunities.

So, how do you go about it effectively?

1. Rein in your running costs

Conducting a thorough review of your business will allow you to see where you might make any savings. This internal MOT should begin with on-premise costs – identifying every expense involved in opening your doors and examining whether you are still getting the best deal. Utilities represent a classic hidden cost here, so consider shopping around for another supplier or using intelligent heating/lighting options that could reduce consumption. Encourage employees to get involved too: this will not only generate some great ideas, but bring people on board with any changes you decide to implement. Moving your IT infrastructure to the cloud is another measure that can bring instant savings and work benefits – reducing both your running fees and offering you and your employees greater mobility.

2. Automate, automate, automate…

Address any shortfalls in your set up that represent a stumbling block to the accessing and sharing of business information between departments and reporting.  A full business solution including ERP and CRM are key options – offering access to vital data at the touch of a button both in and out of the office, but don’t overlook functions such as HR. Giving your employees direct access to traditional HR tasks such as timesheets and expense claims will speed up both the process and any associated billing, especially if you can do this online. Shared holiday calendars will also give you an instant picture of your available resources at any given time – during a particularly busy period, for example, or for project planning.

3. Nurture relationships

Are you as in tune with your customers as you could be? Look at where and how things can be improved to strengthen relationships and generate more sales. Reviewing your prices regularly will guarantee competitiveness and build loyalty with both new and existing customers – especially when used in conjunction with effective stock management. Make use of CRM software to monitor leads and share data for more targeted marketing that could lead to repeat or cross-selling opportunities. Discover how you can identify hidden opportunities for growth with our new tool.

4. Make paying easy!

According to Santander’s 2015 Corporate & Commercial Survey (conducted by YouGov), a quarter of SMEs polled claim late and failed payments from customers as their biggest obstacle in cash flow. While the government’s Small Business, Enterprise and Employment Act (which gained Royal Assent in March 2015) aims to clamp down on late or bad payers, you can help mitigate the problem by introducing prompt invoicing. Automating the billing process will assist with this – as will reminders on or before the due date to encourage faster payment. First and foremost, however, look at what you can be doing to make paying easier for your customers – offering them a range of methods. Consider adopting early-bird discounts in return for shorter payment terms or access to customer-authorised automatic debits. Review your accounts receivable on a regular basis and build up a picture of consistently late or bad payers so that you can work out bespoke ways to tackle each case.

5. Get your house in order

Monitor your cash flow on a weekly basis to make sure things are continuing on track throughout the year. Automate wherever possible to ensure accurate and instant reporting – as well as access to crucial information for employees and managers working away from the office. Tighten your inventory and keep stock moving with price changes and discounts so that your warehouse list doesn’t become stale and you free up existing space for new products. You can work towards this with regular reporting of stock levels, as well as build a good supply of vendors to ensure that you always have products available for customers. Shine the spotlight on your own purchasing and look at what can be done to shake things up – such as a change of vendors or renegotiation of terms to ensure you’re paying the lowest prices.

How can Sage help?

Sage 200 Extra is a flexible business management software solution that can help you keep a tight rein on your company cash flow. Find out more