Keeping it tight(ish)

Written by LiveLink
February 11th 2024

Keeping it tight(ish)

Recently we had a couple of financial outlays that could really have been avoided. Our clients double clicked and triple clicked on their payment links, ending up in them transferring two or three monthly payments to us, in stead of one!

A genuine boo boo, as they didn’t think the payment had gone through or registered. It had… 1,2, 3 even 4 times!

Of course we reversed and transferred back these mistaken payments, but the run off was not only a loss in their bank accounts (if only for a  short amount of time)  But a financial hit for us, because we had exorbitant bank charges to pay in order to reconcile.

So, apart from unforeseen outgoings, have a read below about how to look after the pennies and the pounds will look after themselves!

Keeping the purse strings tight in business is crucial for maintaining financial stability and sustainability. Here are some strategies to achieve this:

1. Budgeting: Develop a comprehensive budget that outlines all expenses and revenue streams. Regularly review and adjust the budget as needed to ensure spending aligns with financial goals.

2. Monitor Expenses: Keep a close eye on expenses and look for areas where costs can be reduced or eliminated. This might involve negotiating better deals with suppliers, finding more cost-effective solutions, or cutting that monthly treat subscription.

3. Prioritise Spending: Allocate funds to essential areas of the business first, such as paying employees and covering operational costs. Non-essential expenditures should be carefully evaluated and limited.

4. Control Cash Flow: Manage accounts receivable and payable effectively to optimise cash flow. Encourage prompt payment from customers while negotiating favourable payment terms with suppliers.

5. Negotiate Contracts: Negotiate contracts with vendors, landlords (or be virtual) and service providers to secure the best possible terms and pricing. Explore options for bulk purchasing or long-term commitments to lower costs.

6. Limit Debt: Minimise reliance on debt and avoid unnecessary borrowing. If borrowing is necessary, choose low-interest options and have a clear plan for repayment.

7. Invest Wisely: Be cautious when investing in new initiatives or expanding operations. Conduct thorough cost-benefit analyses to ensure investments will generate positive returns, decide if there is anything you can keep ‘in house’ rather than outsource.

8. Implement Cost-Saving Measures: Identify opportunities to save money through efficiency improvements, automation, and technology investments. Encourage employees to suggest cost-saving ideas and incentivise frugality.

9. Review and Adjust Regularly: Continuously monitor financial performance and regularly assess the effectiveness of cost-saving measures. Adjust strategies as needed to adapt to changing market conditions and business needs. This point also includes making sure you are charging enough for the services/products you provide.

10. Cultural Emphasis: Foster a culture of financial discipline and responsibility throughout the company. Educate employees about the importance of cost control and involve them in the process of finding efficiencies.

By implementing these strategies consistently, businesses can maintain tight purse strings and achieve greater financial stability and success.