Author: Bizink

Owning a small business in the construction industry can be incredibly stressful. In addition to the long days and difficult working conditions, you have to worry about cash flow issues. It can take a long time to collect on payment from your clients or contractors who hired your business, and in the meantime you have to pay employees, cover fixed expenses, buy supplies and pay your own subcontractors.

Here are three tips for managing your cash flow if you own a small business in the construction industry.

1. Be aggressive in following up on invoices

Small businesses in the construction industry are at a risk of having their clients not pay them on time. Or at all. Being too passive in collecting on unpaid invoices or reminding clients when payment is due will not help you collect the money you need to pay your bills.

Sending out reminders of invoices that are due can not only speed up the process of getting you paid, it can encourage clients who were considering not paying you to reconsider. Reach out to clients if necessary to discuss payment options. Even a payment schedule is better than no payment at all.

The worst thing you can do is sit around and hope your client will pay you.

2. Watch for scope creep

Scope creep occurs when clients or other project stakeholders change a project’s goals or deliverables. Almost all projects experience some form of scope creep, but too many changes to a project can severely impact your bottom line, and it can hurt your cash flow.

Make sure the terms of your project are set out clearly and let clients know that any changes to the project will result in additional fees. If clients then attempt to change the project you can remind them about the original agreement and the additional fees. If they insist on making the changes, you are free to charge the agreed upon amount.

3. Consider delegating the financial tasks

Many construction small business owners become self-employed because they have construction skills, not because they want to be businessmen. The financial aspects of running a construction business are complex, and take a great deal of time and planning. That can add a lot of responsibility to the business owner.

Hiring someone to take care of the financial aspects of your business, or even to advise you about the decisions you face, can take the stress off you. That’s exactly how we can help. Having someone on your side who has the financial expertise can assess your business, advise you about your cash flow and help you secure funding is invaluable. It will be worth it in the long run with the time and money you’ll save.

Final thoughts

Most small business owners face cash flow issues at some point in their career. Unfortunately, those in the construction industry typically have a more difficult time managing cash flow. The large scale of the projects, the multiple stakeholders involved, and the number of factors that can go wrong on a project all increase the financial risks.

Following a few steps can greatly enhance your cash flow and make financial management in your business an easier process.

Please get in touch to find out how we can help your construction business.

Having total control over your finances can give you an amazing sense of freedom.

However, it takes a lot of discipline and hard work for you to be able to achieve this. In this article, we will share some of the most useful tips that you can start now to live a better financial life.

Build multiple sources of income

Whether it’s through your business, a side hustle, or investing, building your income network can help you secure your financial future. Starting early means you can compound over a longer time period and can take on more risk as you have more time to recover from mistakes.

Grow your savings

Understand your cash inflows and outflows so you can work out how much can be set aside as your savings. It is recommended to set realistic goals and a concrete plan to reach your targets. If you’re not yet ready to make investments, at least have your current affairs sorted.

Avoid bad debt

Bad debt is something that leeches money from you over the long-term, including credit card debt or interest for late bill payments. It is also important to note that too much bad debt can impact your credit score and prevent you from borrowing in the future.

Set aside an emergency fund

Your rainy day fund, which could be around 6 months worth of your living expenses, should be one of your priorities. Even just saving 10% of what you get each paycycle can eventually get you to that target amount.

Live below your means

Living below your means requires suppressing your desires at a certain point. This is probably the most underrated personal finance skill, but one that actually works.

You may be tempted to show off your peacock feathers to keep up with your peers. However, those who enjoy enduring financial success have a propensity to not care about what others think or what others are doing with their lives.

Expert Financial Planning

You may find some of these personal finance hacks challenging to do, but no one said the road to financial freedom is going to be easy. Once you’ve adopted good money habits and learned how to discern what works and what doesn’t for you, you’ll see that all your efforts are worth it.

If you want to chat more about financial planning or growing your income streams, drop us a message so we can schedule a one-on-one consultation.

We cannot stress further the importance of properly managing your cash flow to ensure the smooth running of your business. However, in times of crisis such as the ongoing COVID-19 pandemic, this becomes more than important– managing your cash becomes a necessity for survival.

If you are experiencing cash flow troubles, here are five things you can do to manage your cash flow better.

1. Check your expenses.
   Now is the perfect time to review where your money is going and check which expenses can be minimised or eliminated completely. Re-evaluate your expenses and decide which ones are essential and should stay, and which ones can be trimmed down or cut altogether.
2. Negotiate your debt.
   Initiate a discussion with your lenders if interest only or deferred payments on outstanding debts is possible.
3. Reduce your rent.
   There are some government-backed rent assistance schemes which subsidise a portion of your rent and/or require landlords to waive part of it. Aside from this, you can further reduce your rent by checking if it makes business sense to move to a smaller space, close down other offices or stores that are not performing well, or move to a more affordable commercial space within your budget.
4. Request for more flexible payment options.
   It never hurts to ask, especially if you’ve been transacting with your vendors for a long time and you’ve established a certain level of mutual trust and confidence. You can request for more flexible payment options or longer payment terms.
5. Tap into available credit lines.
   Take advantage of available lines of credit and place the funds in interest-bearing accounts.

Assessing your cash flow is fundamental to gaining a better understanding of your business’ financial health. As cash flow experts, we can do your monthly, weekly, or even daily cash flow statements. This gives you visibility on where your cash comes in and goes out to, as well as allows you to plan ahead.

Every small business owner knows how challenging it is to cut down expenses without somehow compromising internal or external quality. Regardless of the nature of your business, the first step to reducing your overhead costs is to take the time to go through every single expense you have. Next, assess which ones are necessary for your business to operate smoothly, what can be trimmed down, and what can be eliminated completely.

In this article, we will give you some smart and practical tips that you might not have considered to lessen your costs while maintaining employee and customer satisfaction.

Shift to Remote Work Setup

The COVID-19 crisis led to the widespread adoption of remote work setup– and it actually works. Depending on your type of business, you might want to consider making a permanent shift to telecommuting for certain roles to reduce costs. If you still need to maintain a physical office, you might move to a smaller office space to account for the smaller number of in-office staff.

Negotiate With Suppliers

Don’t hesitate to contact your suppliers and vendors to request for flexible monthly payment plans or discounts especially with the current tough economic climate. They are often willing to help out small- and medium-sized business clients and cut them a break.

Review Your Software Subscriptions

It is no secret that cloud-based apps and tools can help you manage your business with ease. Although a few dollars a month might seem affordable at first, the costs can quickly add up once you set up your subscription for multiple apps.

If you want to reduce your overhead costs, audit your recurring software subscriptions and cancel those which you rarely use. You might also want to downgrade your plan or opt for the free version of these tools. Furthermore, you can search the internet for cheaper or free alternatives that offer the same functionality.

Take Advantage of The Gig Economy

Hiring qualified freelancers and independent contractors can be less expensive than hiring full-time employees. You won’t have to pay for benefits and they most likely have their own equipment. When choosing freelancers, make sure that they have a portfolio of previous relevant work that you can review, as well as client testimonials.

Automate Administrative Tasks

Some administrative duties such as invoicing, appointment scheduling, and customer follow-up can be automated instead of hiring an administrative assistant. You can also invest in an automated live chat system to assist multiple customers at the same time.
Maintain a Paperless Office

If you are still relying on physical printing, going all-digital and paperless will remove printing-related costs and keep your documents better organised. Aside from being cost-effective, a digital workplace is also environmentally friendly and means data is easily accessible.

Revisit Your Marketing Strategy

In order to grow your business, you must be willing to set some budget for marketing, even if you are trying to cut down on expenses. However, before you continue with your marketing strategy, it is important to evaluate each channel and its return on investment.

Get a clear idea of how much you are spending and gaining from each marketing channel. Test and measure different channels, and re-allocate your budget accordingly if you find one that isn’t working.

Get a financial advisor

Regardless of how confident you are with your new budgeting, it pays to have a fresh set of eyes to look into it. An experienced accountant can provide you with an objective analysis of your budget allocations and help you save even more on your expenses.

Get in touch with us today and let us help you spend your funds wisely.

So you’ve set up your business and sold some products and services. Now, you have to send an invoice to collect your payment. But what should you include on your invoices in order to get paid faster?

Even if you’ve been running your business for a while, you might be missing other information that you should include. So here is a step-by-step guide on what to include on your invoices.

1. Make your invoice look professional.

Add your logo and use professional fonts, styling, and colours that complement your brand. Modern accounting software platforms allow you to set up invoice templates which saves you reinventing the wheel each time. Chat to us if you need help setting this up.

2. Label your invoice clearly.

Make sure that you display the word ‘invoice’ clearly at the top of the document. If relevant, it may also need the words ‘tax invoice’. It should also have a unique identification number for your own records. You need to have a reference for all your invoices and make sure that there are no duplicates.

For the identification number, you can use a sequence that gradually increases and add letters before the number to indicate a specific client. Again, most modern accounting software platforms will do this automatically, but it pays to check you’ve got it set up correctly.

3. Add company information.

Add the details of your company and the company or client you’re invoicing. This includes:

• your company’s name, address, and contact information
• your customer’s company name and address, including a contact’s name to ensure that it reaches the right person (if you’re invoicing another company)
• your customer’s name, address, and contact number (if you’re invoicing an individual)
• your registered office address and company registration number (if you’re a limited company)

4. Write a clear description of the products or services.

The description of the products or services that you’re charging for doesn’t have to be long. However, you need to make sure that it is detailed enough for your client to know what they’re paying for. Aside from the description, you should also indicate the quantity and the price.

5. Add important dates.

You should add the date you provided the product or service (supply date) and the date you created the invoice. Add the invoice date at the top of the document together with your name/ company name, address, and contact details. Meanwhile, the supply date could be added together with the description of what you sold.

6. Add up the costs.

Aside from indicating the cost of the individual product or service together with the description, you also have to put the total amount that must be paid. If you’ve agreed to give a discount or there’s a special promo, you must also clearly indicate it on the invoice and subtract it from the total. If applicable, you must also include the VAT amount on your invoice too.

7. Indicate payment terms.

Although you likely have agreed on certain payment terms with the customer beforehand, it is still recommended to note the terms of the payment on the invoice.

For instance, if you expect to get paid within a certain number of days, you can remind the customer by adding this information on the invoice. Furthermore, you should note how exactly the customer should make the payment. Add your bank details or other payment information.

8. Add payment options.

Online invoices on modern platforms allow you to include payment options to help you get paid faster. Adding a “Pay Now” button that allows your customers to pay immediately via credit card, debit card, or automated clearing houses like PayPal and Stripe is proven to speed up the payment process. Want money in your bank quicker? It’s a no brainer!

Chat to us

There are a lot of accounting and invoicing software platforms and invoice templates out there that you can use. If you have any questions, please get in touch with us.

When customers make a buying decision, they’re not just considering the quality and price of your products or services, they’re also evaluating the ease and convenience of the whole buying process. As a business owner, you should offer different payment options to provide the best customer experience and to ensure you receive timely payments

Here are four ways your small business can accept payments in 2020:

1. Credit and debit cards

Data suggests that 75% of customers prefer to pay with a credit or debit card both online and in person. To be able to accept card payments in your brick-and-mortar store, you’ll need to have a card reader and a merchant account.

Meanwhile, if you want to accept online payments via credit or debit card, you’ll need to have an ecommerce website and a payment gateway, which encrypts sensitive customer information. For recurring billing, you can have your customers sign up for a subscription billing plan which will allow you to charge monthly payments on their credit or debit card automatically. This will not only offer customers convenience, but also ensure that you get paid on time.

2. ACH (automated clearing house)

Automated clearing house (ACH) processing is ideal for recurring payments in a subscription-based model as it allows customers to provide you with their bank account and routing numbers for electronic payments.

Compared to credit and debit cards, the fees are lower. ACH also offers convenience as it will just require one-time input of information and the money will be withdrawn as arranged.

3. PayPal, Stripe, and Square

PayPal, Stripe, and Square do not require you to have a merchant account. PayPal and Stripe are commonly used online and allow for seamless transactions. Meanwhile, Square is the leading choice for brick-and-mortar stores as it lets you turn your smartphone or tablet into a point-of-sale device by integrating a magstripe, Bluetooth card reader, or chip. PayPal can also allow you to accept payments in person, but you will have to buy a card reader and download the app.

4. Contactless payment options

Contactless payment options let customers pay wirelessly and without having to input a PIN– they will just have to wave their device or card over the point-of-sale device.

Visa and Mastercard are offering contactless cards to customers, and there are also mobile wallets compatible with iOS and Android which encourage customers to use this payment option. As a business owner, you’ll only have to upgrade your equipment with a near-field communication reader or update your software, depending on your current system.

At this day and age where technology is constantly evolving and changing the way we do business, it is important to ensure that you are adapting to stay competitive.

Get in touch

If you need some guidance on the right payment options for your business, feel free to drop us a message so we can schedule a one-on-one consultation.