How to increase your business budget
Every business-owner strives for a business that’s lean and efficient. That’s why we want to show you how implementing some strategies for increasing your business budget, cutting costs, and turning to experts for assistance will set you free a little. Giving you the opportunity to grow your business according to your goals.
Let’s take a closer look at four of the most reliable ways to increase your business budget.
Make payment terms for clients short, but extend those with vendors as far as possible
Ultimately, you want those goods and services paid by your clients before you have to pay your vendors. That means more money in your bank and positive cash flow. So, you should negotiate your payment terms with this in mind. Try to keep your client’s payment terms short, for example: 7 or 14-day accounts. Then work on an agreement with your vendors (or as many of them as possible) for extended payment terms of 30, 60, or even 90 days.
Find the right inventory balance if you’re a goods-based business
Holding on to too much stock reduces the amount of cash flow you have available because you have to pay for that stock and store it. This means your outgoings aren’t being offset by enough money coming in.
On the other hand, having too little stock can lead to a breakdown in sales. In turn, this defeats the purpose of striving so hard to build those customer relationships. That’s why it’s so important to look at your sale figures at different points throughout the year. This way you can establish the amount of stock you should have on hand, to ensure you cover all orders but don’t have an excess.
Reduce overheads
You have a lot of power to reduce your overheads. The time you spend getting new quotes for utilities, insurances, and other regular expenses will be well worth the savings you could achieve. It’s also worth looking into leasing your company vehicles, for tax incentives that may be available to you.
Check your staffing needs too. Could you trim them back at certain times, particularly when overtime kicks in? Don’t look at each change as being a waste of time because it will only bring small savings. Just a few of those little savings each month can add up to a considerable amount across the year. Furthermore, you can reinvest in your business in areas that will cause it to grow, rather than just keep it ticking over.
Manage your business strategy more effectively with the help of an accountant
Visiting your accountant shouldn’t be a one-time thing when the end of the financial year rolls around each year. The more often you reach out to your accountant, the more positive influence they can have on increasing your financial returns and reducing your cash flow. Letting them take a proactive role and creating a tailored business plan will not only save you $$$, but provide you with a firm idea of the direction you want your business to take over the next year and well into the future.
The best Gold Coast accountants are hands down, the team at IQ Accountants. Our highly skilled accountants / bookkeepers will be able to form a custom business plan that your company can start benefiting from right away. Call us today on 07 5576 0011.
The beginning of a new year is a great time to put a bit of extra research and work in to see how you can run your business more efficiently. Follow these tips to increase your business budget and make it a prosperous year!
Ask yourself… Which area of your business budget could use the most attention?