Tag: alleviate your stress

February 5, 2020 Accounts, Bookkeeping

How Healthy Is Your Working Capital?

We all know that cash is king when it comes to business success, but what exactly is ‘working capital’ and how does this financial metric help measure the health of your business?

Working capital is made up of the cash and assets that are available in the business to fund your operations and keep you trading. It’s worked out by taking your current assets (the things you own) away from your current liabilities (the things you owe to other people).

So, why is working capital such a critical metric?

Having the liquid capital needed to trade

It’s possible for your business to be busy, successful and profitable, but for your cash position to still be in poor health – and that can have a serious impact.

If you can’t readily convert your assets into liquid cash, it’s a struggle to meet your cashflow goals, pay your bills and fund your day-to-day operations. But with the optimum level of working capital, you strengthen your balance sheet and put the company in a solid financial position.

To achieve this healthy level of working capital you’ll need to:

  • Proactively manage your cashflow – cashflow feeds your working capital by pumping liquid cash into the company and keeping the balance between assets and liabilities in a strong position. But to achieve this, it’s vital to achieve a positive cashflow position, where your cash inflows are greater than your cash outflows. This means getting paid on time, lowering your outgoings and keeping a close eye on your ongoing cash position.
  • Monitor and forecast your financial position – running regular financial reports helps you stay in control of your finances. With careful monitoring and forecasting of your cash position, you can ensure you don’t end up in a negative cashflow position, without the requisite working capital to trade and fund the next stage in your business plan. Cloud accounting software and business intelligence apps have made it easier than ever to create up-to-date, real-time reports and run dashboards that show your key metrics.
  • Use additional finance when required – if working capital is looking thin on the ground, then additional funding may be needed to bolster your balance sheet. Short-term finance options (such as overdraft extensions or invoice finance) and longer-term business loans can be needed to keep working capital on an equilibrium.

Talk to us about optimising your working capital

Working closely with your bookkeeper is vital if you want to promote the ideal level of working capital in the business. We can help manage your cashflow, monitor your financial metrics and provide access to additional finance and funding when your capital needs a boost.

Get in touch to start maximising your working capital.

January 22, 2020 Uncategorized

Start Your Year Off In The Performance Zone

Getting back into work after a break can be hard.

You might be struggling to get back into your routine and engage your brain in work. Or, perhaps you spent time setting your goals and planning your year and you’re full speed raring to go. There is however, an optimum approach somewhere between these two scenarios – we call this hitting the ‘Performance Zone’.

The ‘Performance Zone’ sits between the ‘Comfort Zone’ and the ‘Danger Zone’.

It’s easy to hang out in your Comfort Zone. We just keep doing what we’ve always done because so far it’s worked… and there’s no motivation to change. However, sitting comfortable in times of such rapid change can leave you exposed. Your competitors, those working in the Performance Zone, setting goals and making incremental changes and improvements, could squeeze you out.

Working in The Performance Zone enables you to break bad habits and form good ones, achieve your goals and improve the value of your business. When working in your Performance Zone, you’ll be engaged in your work and adopt new learnings, processes and technology to streamline your business and make it more efficient.

Be wary of putting the full throttle down though. If you stretch too far out of your Comfort Zone, past the Performance Zone, you may find yourself in the Danger Zone. Committing to a massive amount of change all at once can lead to volatility, burnout, mistakes resulting re-work, the loss of a key team member and cause you to work even longer hours for no gain (apart from stress gain).

The aim is to set goals and implement changes to move beyond your Comfort Zone into your Performance Zone. If you do find yourself hitting the Danger Zone, it’s ok. Retreat back into your Performance Zone… not back to your Comfort Zone. You’re here to improve your business performance, that won’t happen from your Comfort Zone.

This concept applies to your entire team.

Motivate them to work in their Performance Zone instead of their Comfort Zone but have processes in place to prevent their burn out. If you notice someone coming in early, staying late and visibly stressed, find out why. Speak to them about the Performance Zone and offer support to help them manage their workload, prioritise work and reduce their stress levels.

Want help reaching your Performance Zone? Get in touch to find out how we can help!

September 18, 2019 Uncategorized

Finding Work-Life Balance

Looking for a little more work-life balance?

Sometimes it seems impossible when you are in the thick of it. The following ideas might help provide some light at the end of the tunnel.

Prioritise – Work often dictates to us, rather than the other way around. Create a list of all the things that need doing and categorise them. For example, work out the tasks that are ‘important but not urgent’ and ‘urgent but not important’. Task or project management tools like Trello can simplify your workload and and help to prioritise your time.

Delegate – Letting go can be an opportunity for others in the team to shine. Alternatively, bring in a contractor to help clear the load and you may find they bring in new ideas, create opportunities or streamline the process. Don’t limit yourself to what’s on at work – think about what would help at home too, such as a meal kit delivery to simplify the end of the day.

Book it in the diary – We are all guilty of putting off an exercise class or a coffee catch up because work takes over. These events are important for your mental and physical health and may give you space for creative thought or the ability to think with more clarity. Plus, you’ll return to work feeling more productive. Book it in and consider joining a group so you are more committed to turning up!

Use the technology to help you – ‘Always on’ technology such as smart phones are designed to make life easier but we’ve ended up busier than ever. So choose the apps and tools that can reduce the stress. Whether it’s for communication and meetings, or your filing and accounting. An app could save you time and allow you to get on with other things.  We can help with the right accounting software solution to reduce the paperwork.

Share with your network – Are there individuals in your network who face the same challenges or can help you achieve your goals? Set up a monthly breakfast to catch up, support and learn from each other. You’ll go back to work with new inspiration.

Do what you love – At the end of the day, your work is ‘part of’ your life not separate from it, so if you enjoy it, you’ll feel you have more ‘balance’.

Get in touch to talk about how we can help you achieve balance in your business.

September 12, 2019 Accounts, Bookkeeping

Choosing a new business bank account?

A business bank account is an essential requirement for any business. But with so many banking providers out there, how do you know which business account to choose?

The key is to know what you require from a bank account and to choose a bank that understands the banking, financial and funding needs of your business.

Choosing an account that fits your business needs

Whether you’re a new sole trader or an established limited company, it’s advisable to maintain a clear divide between your personal and business money. So, it’s vital to open a business bank account, giving you a separate account to handle your business transactions.

The choice of available accounts can be baffling, with the big corporate banks and high-street providers offering a range of accounts and new digital challenger banks also adding to the available options for business owners.

When looking for a business account consider:

  • Bank charges – some banks offer free banking, others will charge you a monthly fee. And most accounts will charge you for things like cash withdrawals, payments in foreign currencies and going into (or over) your agreed overdraft limit.
  • Earning interest – look at the interest rate paid on the balance in your account. The higher the interest percentage, the more money you’ll earn on the cash in your account. The rate is unlikely to be high, but it’s still worth assessing the potential for a return.
  • Overdraft facilities – cashflow can ebb and flow in any business, so an agreed overdraft facility can often be a lifesaver when cash becomes tight. Look at what overdraft is available and what you’ll pay in penalties if you exceed the agreed limit.
  • Access to finance – if working capital gets exceptionally low then you may need to borrow a lump sum of money. If the bank has attractive options for bank loans, invoice financing or asset financing, that gives you and your business more flexibility.
  • Mobile apps and technology – digital is changing the banking sector at an incredible pace, so look at the quality and functionality of the banks internet banking, mobile banking apps and online financial management tools. Many of the emerging challenger banks are digital-only and offer a great online experience for business users.
  • Support and relationship management – the big banks have cut back their bricks and mortar presence on the high street in recent years. Look at whether you’d have access to a business banking adviser, or whether support is all online or done over the phone. A good relationship with your bank is invaluable when cashflow is tight.

Talk to us about selecting your ideal bank account

If you’re in the market for a new business bank account, come and talk to us. We’ll help you understand the key requirements you need from your account.

Scroll to top