Tips for Improving Your Cash Flow
Working in recruitment often involves problems with cash flow. The lack of capital can lead to all sorts of problems, none more obvious than the inability to cover business expenses and pay wages. A business is unable to function properly if there isn’t a decent cash flow running through the veins of the establishment. This isn’t a secret in business, yet many organisations still struggle with cash flow. Here’s how you can improve yours.
Cutting Costs Within Your Business Will Help Improve Your Cash Flow
Begin by looking into ways to cut the costs of your business; here are a few ideas to get you started:
- Know exactly where your money is going and where it’s being spent. If you have decent records, you’ll be able to pick up any areas where the money is being spent but where it isn’t essential.
- Consider the size of your office space. Could you afford to move to a cheaper, smaller office space? Alternatively, do you think you could run your business out of your home? If you have to rent an office space, ask the landlord if you can alter the rent payment arrangement, such as quarterly rather than monthly.
- Review any expenses being claimed by your staff and decide if they are really necessary. State clear policies so all staff know the boundaries to avoid any complaints and confusion.
- Ask your accountants if you can pay a monthly fee rather than an annual one.
- Avoid having a company car.
- Reduce your bills by running an energy-efficient office space. Turn down the temperature in the office, ensure that all equipment is turned off at the end of the day, and save on ink by not printing anything that isn’t essential. Use online collaborative tools such as cloud computing, which eliminates the need to print copies of documents.
Dealing With Debt Before Things Get Out of Hand
If you’re finding it difficult to pay your bills, it’s vital that you tackle the problem head on. Ignoring debt only makes things worse. If you risk going into the red, evaluate your current situation and work out new ways of cutting more costs and increasing your earning potential. Contact the companies you’re indebted to and arrange a meeting to discuss alternative payment options.
Invoicing Options That Will Release Capital Into the Business
Many recruitment businesses find all their capital is tied up in the invoices being sent out to clients. You can avoid this problem with your cash flow by using recruitment finance. Factoring is a way of gaining instant access to the money you’re invoicing for. You’re free to use the money to pay your current workers and invest in the business, so it’s possible to increase your earning potential without having to wait. If you’re interested in this type of financing option, visit http://www.cashsimply.co.uk/ for further information and advice.