Jeremy's Blog

Well the answer is as simple as climbing a mountain. A simple nine step plan can show exactly how an accountant can improve your technology firm.

The steps are just like being Sir Edmund Hillary climbing Mount Everest, with the Mountain being the businesses goal of your technology firm, you being Sir Edmond and a consultant from the Success Group being the Sherpas.

Step one; define your personal goal, what do you want to get out of your technology firm? Then define what you want your technology firm to achieve. This is where a consultant from the Success Group can help your technology firm; the consultant can ask you the right questions for you to see your goal, the mountain top.

Step two is strategies. Strategies which your Success Group consultant can help you define for your technology firm and its goal. The strategies are like base camps up the mountain, set at regular intervals. Such as the mountain top (goal) is set for 10 years then a base camp might be at half way, then 2 years in and, to bring the base camps back to reality, another at 90 days.

Step three; set financial targets. Your technology firm needs to know its cash flow and budgets. These should be set with the base camps along the way to reaching the top of the mountain.

Step four; resources. Your Success Group consultant can highlight and suggest to you new recourses your technology firm may need. These could include a new tech person or a new location. These points need to be ones which will be achievable with the budgets established in point three and work towards the mountain top.

Step five; set dashboards, your technology firm needs dashboards to tell you the progress you’re making. The progress then needs to be metered and worked on when they are not reaching a set mark of achievement.

Step 6; time to execute the plans with the help of your team at your technology firm. Once they are all updated on the plans you have freed up your time to work on your technology firm, not just in your technology firm.

Step 7; incentivise, why not liven up the workforce in your technology firm with incentivises. Your team works for your technology firm so show them they’re appreciated in their roles. Perhaps it’s time for someone to become manager?

Step 8; a good back office. Your Success Group consultant will emphasis this step. As a technology firm owner, you need to make sure that your business data is being collected, so seeing financial information is always easy, this also attributes to achieving the base camps.

Step 9 is simple, repeat. Every 90 days you, as the technology firm owner, and your Success Group consultant need to analyse all of the steps every 90 days. 

As previously mentioned managing cashflow basically all comes down to understanding cashflow plans. It can also come down to a few extra factors, some of which will suit you managing cashflow in your business more than others.

If a business always got paid for its sales the instant they were made, managing cashflow would not be an issue at all. However, the days of selling lemonade at the front gate and being paid then and there are over!

So, a first tip or trick that could help to managing cashflow better is offering discounts to customers who pay their bills on time, this will also create a great rapport with your best customers and in turn could lead to  new clients hearing about the rapport you have.

Other tips to managing cashflow better could include;

Asking your customers to make a deposit at the time orders are taken, this adds to the managing cashflow better scheme because it means funds will constantly be coming in and customers will know how serious you are about the sale at hand.

Get rid of old, out of date products by discounting them. Everybody loves a good discount and to beat loss on older products not selling why not come up with an innovative idea like a discount or when a full priced product is sold the customer is offered a discount on the dated item? Managing cashflow can mean new and interesting ideas as well as the structure of planning.

Distribute invoices promptly and follow up straight away if payments are slow in return. Not all customers are going to be as prompt as they can, so a little reminder will always go a long way.

Communicate with your suppliers so they know your financial situation. That way if a shortfall did occur, one you didn’t prepare for, and you need to delay a payment, you'll more likely have their understanding.

Shop around for your best supplier; the lowest price may not be the best. Look for someone with flexible payment terms as that can help with managing cashflow more than a one off low price could.

 Bearing in mind not all of these points may help towards your managing cashflow but some may and others could be tweaked to suit your specific needs.

How do I get better at managing cashflow? A simple question with a lengthy answer with similarities to an extreme water slide.

The first element to knowing how to get better at managing cash is understanding the cashflow of your business.

Cashflow is the movement of cash into or out of your business but in order to keep on top of the cashflow, understand what is happening and applying it to the everyday life of your business one must do three things.

One; Plan ahead

Two; record of all the money coming into the business less all the payments as they are made.

Three; Set benchmarks and goals that can be regularly met and analysed.

Start with a plan that lays out where and when money is coming against when you pay for things.

Managing cashflow is like an extreme water slide, it’s not a smooth ride if there are not equal amounts of water (cash) flowing in as there is flowing out. No one likes the pain of a burn from an extreme waterslide lacking water and no one likes the burn in the accounts when there aren’t even amounts of cashflow.

An accurate cashflow plan can alert you to trouble well before it strikes but make sure your plan is educated. Managing cashflow will mean looking at the history and planning goals ahead. Keep a dialogue running with your financial experts, ask the tough questions and be honest about shortfalls or situations that are not fitting into your plan.

The second part of managing cashflow is having knowledge and recording the amounts and dates of upcoming expenses.

That means not only knowing when each penny will be spent, but on what. Things like rent, inventory, salaries and wages, sales, taxes, benefits paid, equipment, professional fees, utilities, office supplies, debt payments, advertising, vehicle and equipment maintenance and fuel can all be analysed and figures recorded to make sure the upkeep of payments out are feasible with the amounts of funds coming in.

So, how do I get better at managing cashflow? It’s as simple as a water slide, you know what you don’t want, so to avoid that it comes down to understanding your cash flow through planning and accurately recording amounts coming in and going out.

It’s not very often one can compare a business element to the newest sports motorcycle from BMW but this post has found the link!

The newest sports bike to hit the market, the 2012 BMW MSRP S 1000 RR, is a well oiled machine and how is it linked to the world of business... Teamwork.

The S 1000 RR needs all the components of its motor to work together for it to succeed in working.

A business, small or large, needs its high performing employees to work together to achieve tasks and the overall goals of the business.

Without turning this post into a manual for motorbikes, I will show you the similarities of teamwork.

The S 1000 RR’s motor consists of Pistons, a cylinder block and a valve train contained in the head. Each component has its own set of skills and jobs. For example the Pistons are driven by controlled explosions of a fuel and air mix and they move up in down in the Cylinder block turning the crankshaft that transforms the energy from the pistons into a rotary motion.

Long story short, each component does a specialised job which contributes with other components (teamwork) to achieve a goal. Thus becoming a well oiled machine which runs smoothly and efficiently thanks to that teamwork.

So, for your business to run as smooth as the BMW Bike employees (components) need to know their jobs, what is required of them, matched to their specific skill set, all put together and there is the team with the necessary components to work together.

It is all a concept of synergy, when combined elements produce a total effect that is greater that it’s individual elements.

The S 1000 RR’s motor without its pistons means its fuel mixture would not be able to power the machine. Therefore its awesome sporting abilities would be at a standstill.

The teamwork means skills are used resourcefully.

A business lacking cohesion, a collective input, a mixture of skills and understanding of roles means goals will not be achieved to their full potential.

A good leader (person riding the Bike) is also needed to communicate to the employees (motor) what the objective they are collectively working towards is.

So for the creative mind, the brand spanking new $18,184.00 S 1000 RR is in a way affordable for anyone in business, well the idea of its teamwork is.

We can all dream, right?

• Ensuring that assets are purchased in the company’s name
• Ensuring that any borrowings that the company does are the best possible terms
• Ensuring that a system of internal control has been implemented throughout to company
• Reviewing budgets and cashflow forecasts
• Reviewing periodic monthly financial reports and key performance indicators, comparing these to the budgets and enquiring into the reason for any variances
• Ensuring that staffs are employed under appropriate agreements and that staff evaluations are conducted on at least an annual basis.
• Seeking assurance from company accounting personnel that all debts are being paid in the normal course of business
• Ensuring that management is reviewing any environmental issues that may affect the business
• Encouraging management to implement appropriate risk management strategies for events that may affect the company e.g. weather, cyclones, tsunamis, burglary, armed robberies, death or inability of key personnel to perform their duties.