8th October 2015
There is no ‘one size fits all’ answer when responding to the needs of business accounts in different sectors. All businesses often face unique and highly-demanding accounting challenges which are specific to their area of the market. Understanding factors such as cash flow and credit control are essential when identifying what makes a business tick and, subsequently, which services or products would be most valuable.
In some areas of the market, seasonal restrictions dictate an ‘a-typical’ pattern of cash flow. It is normal that agricultural businesses face large costs from January to September, for example, as they plant, grow and harvest their crops. When these crops are later sold, the result is a flash-flood of revenue, followed by a calmer period when the fields lie fallow.
You may see a similar pattern of cash flow in a business which imports a large amount of stock, paid for upfront, from China and which doesn’t arrive in the UK for a long time. Documenting this ‘ebb and flow’ nature of cash flow can be complicated, with regard to both everyday bookkeeping and when drafting your annual accounts. Seeking professional advice can therefore be crucial in steering your business onto a course of smooth sailing through the next accounting year.
Maintaining credit control is a key component in the underpinning of positive cash flow. This task can be more or less demanding depending on the nature of your business. In larger industries that work with lots of clients, there may be a mountain of smaller invoices. Recording and chasing all of these can turn into a tedious and time-consuming job, compared to a business that has fewer invoices of higher value.
Credit control isn’t an easy skill to master, especially if you find yourself in these situations. Not only does your bookkeeping have to be kept in order and up to date, but you may find it difficult to ‘demand’ the money that is owed to you. Here at Nicki Paddy & Co, we can locate your outstanding invoices and take charge of your outstanding credit, giving you less to worry about!
For more information or for help regarding the specific issues your business faces email us at email@example.com or call 01243 92989