Managing your finances can be a headache, Colin Mills (Founder and CEO of The FD Centre) gives you his Top Ten Tips on things you need to do, that will help you manage your company finances better.
1. Make sure you have got an up-to-date 12-month forecast (by month) for profit, cash and balance sheets
2. For tight management of cash flow set up a nine-week rolling receipts and payments Excel spread-sheet and update it every week.
3. Know your break-even sales level.
4. Set up systems and processes so that the business is less dependent on you. Use authority matrices to enforce this.
5. Make sure monthly management accounts are produced so that you know where you are.
6. Monitor your gross margin percentage and think of ways to improve it.
7. Always know what your cash headroom is.
8. Graph your debtor collection days, supplier payment days and stock holding days. Look for ways to 'squeeze' the business.
9. Decide on the most important KPIs for your business and review them regularly (they should be non-financial as well as financial).
10. Get a part-time FD!
Colin Mills is founder of The FD Centre, the UK’s largest provider of part-time Finance Directors, who are dedicated to helping businesses overcome their problems and meet their strategic objectives. Find out if your business could benefit from a free FINANCIAL HEALTHCHECK and get valuable advice for your business’s financial planning. For more information visit: www.thefdcentre.co.uk
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