How to find hidden cash in your company – Part 3
In our previous two articles on helping you to find hidden cash in your company we highlighted that during periods of business growth it can be easy to lose sight of managing money.
By effectively managing and maximising your money will result in improved profits and reaching business objectives.
Our first insight to find hidden cash was to focus on customers who owe you money and how to setup a discipline around collecting money. The second tip was around money tied up in unsold goods and effective stock management.
Combine our previous two insights with our third and final instalment to maximise money and generate more cash in your business.
Managing Billable Personnel Time in Service Companies
Many business products are the skills they sell to their customers, for example accountants, PR people, software developers, consultants and a myriad of other outsourced disciplines.
It can be difficult to accurately measure and invoice time spent by your people on a project. There are also issues about cash flow, for example how often you bill the hours worked to the client, and of course, when they actually pay you.
Ensuring an adequate cash flow from billing for services can be difficult with projects such as web development projects or construction programmes – projects that are complex and may extend over considerable periods of time.
Unbilled service hours are the same as leaving a product lying unsold in a warehouse – a drain on your company’s money.
5 ACTIONS TO TAKE AWAY
- Ensure you get paid on time
- Measure time spent on clients & services and track this against budgets
- Practice pro-active stock control
- Manage your costs – ask of everything, does this improve my business?
- Do a cash flow forecast every week – you’ll be in a good position to keep on top of outstanding money issues
Contact Your Right Hand Finance Team for more information or call 01252 820 002 to find out how our flexible, part time financial controllers and managers can make a real impact on your business success.