Top 3 Silent Cash Flow Leaks for Small Businesses

Top 3 Silent Cash Flow Leaks for Small Businesses

JANUARY 03, 2017
|IN SALES, LEADERSHIP
|BY MARIE HALE

by Elizabeth Andrews

 

Running a small business is often an all-hands-on-deck operation and a lot can get lost in the shuffle. With years of experience working hand in hand with businesses, I have seen all kinds of things that cost businesses time and money. With companies big or small, these are the top 3 things that consistently eat away at the bottom line.

ISSUE #1:  Invoices Aged Over 30 Days

Collecting payments tends to be the most costly part of running a company.  Companies commonly don’t have clear payment terms or tend to soften them to win the sale. With no plan of action to tackle unpaid invoices, many companies resort to a phone call and hope the client answers and pays.

FIX: Preparation and Preplanning.

  • Clear contract terms and documented payment agreements

  • Collecting (and securely storing) payment information for contracts or service agreements.

  • Recurring billing plans using accounting software or payment processor

  • Use of a simple customer interface to make payments

ISSUE #2:  No Reconciliation Process

“Reconciliation” may be a new term. It is defined as “the key process used to determine whether the money leaving an account matches the amount spent, ensuring the two values are balanced at the end of the recording period.”

For companies with linked accounting softwares and bank accounts, many think of this as a hands off task. However, human intervention is necessary to make sure your accounting books square up. When companies finally dig in, they find a variety of things:

  • Unpaid Customer or Vendor Invoices

  • Fee Increases from Vendors

  • Duplicate Charges

  • Unaccounted for Cash Withdrawals or Deposits

FIX: Two options, both will assist in cash flow and tax reporting:

  • Schedule time:  Block out a couple hours each month on your calendar as a recurring event. This will ensure regular attention to finding leaks.

  • Hire an hourly professional: Time is money. Bookkeeping professionals are efficient and as they learn your business, it will take less time to complete your reconciliation. Another set of eyes is also beneficial to see things you may have missed.

ISSUE #3: No Review of Services or Fees

This is common with mom and pop businesses all the way up to Fortune 500 businesses. Many companies don’t take the time to kick the tires on the fees they are paying to vendors. Because many take the stance of “If It Isn’t Broken, Why Fix It,” they are commonly overpaying. I have met with companies that have let 10+ years pass and overpaid thousands of dollars.

FIX: Knowledge is Power

  • Find your contract end / renewal dates for vendors. This may require reaching out to get copies of contracts.

  • Request an account review 6-9 months before the end of your contracts. They may find you now qualify for a new tier or reduced pricing.

  • Ask your tax or bookkeeping professional for recommendations.They are looking at companies’ expenses everyday and may have insight into where costs might not line up with industry standards.

Reach out to your local chamber of commerce, LinkedIn groups, or associations. Let others’ hindsight be your foresight.

Guest Blog by Elizabeth Andrews, with Calibr Merchant Solutions  www.gocalibr.com, 

by Marie Hale

3 Reasons Why That Newsletter is So Important

3 Reasons Why That Newsletter is so Important

JANUARY 03, 2017
|IN BUSINESS
|BY MARIE HALE

Email marketing can do a lot for small businesses. It helps nurture new leads, drives sales, promotes products and services, and builds loyalty. Notice how I mentioned more than just sales? That’s because marketing isn’t only about the bottom line, but contributing to the bottom line. Some email messages, such as promotions, are specifically designed to drive sales, but others, such as newsletters have other important functions.

Here are 3 things email newsletters do to help your business:

1.     Keep your business top of mind. Newsletters are a great way to keep your business in the forefront of your customer’s mind by simply being there. Email is one of the most efficient and effective ways of getting your brand in front of your audience, and newsletters are a great and consistent way to get their attention.

57% of email subscribers spend

10-60 minutes browsing marketing emails during the week.

(Source: today  willChoozOn)

Yes, we get a lot of emails, but we all spend time browsing, reviewing and evaluating them. Make sure your business has visibility where your customers are spending their time.

2.     Engage your audience. Newsletters are great for customer engagement when they are full of information that customers want to read. Why would you want to engage your audience? The more engagement with your business, the more customers connect. The deeper that connection, the more likely they are to purchase.

63% of people requesting information on today will not purchase

for at least three months, and 20% will take more than 12 months to buy.

(Source: Marketing Donut)

Statistics like this reminds us that the customer journey is just that – a journey. Customers need time to make purchasing decisions. By engaging your audience through the purchase decision, you have a far better chance of them ultimately buying from you.

3.     Deepen your relationship with customers. Newsletters are all about providing information to your customer. In our customer-centric environment, this communication is critical to help build the relationship. Plus, they are a great way to share your business values, differentiators and personality. Allowing your customers to learn more about you and your company improves loyalty and increases sales.

When asked which medium consumers would like to receive updates from,

90% preferred an email newsletter, while only 10% chose Facebook.

(Source: Nielsen Norman Group)

If good marketing is talking to the right audience, with the right message, at the right time, why not send a newsletter? The more connected the audience is, the more they begin to view your business less as a commodity and more as a partnership.

Newsletters are just one of the many different types of email marketing messages businesses can send. If you would like to learn more about email marketing and how it can help your business, contact our team today!

 

by Marie Hale