Today’s Responsive Finance tools deliver Cash Flow Finance solutions to SME businesses – enabling your to put in place a modern, efficient Working Capital Strategy that maximises your access to the cash that’s available within your business.
The more access you have to the cash you need when you need it, the more potential you have to use that finance to maximise your business results.
At its core is the Responsive Finance Triad:
- Trade Finance for your outgoings – so you can make the most of the money you spend.
- Invoice Finance for your incomings – so you’re not forever chasing payments to keep your business running day-to-day.
- A carefully selected Unsecured Overdraft to add flexibility in the face of unexpected disruptions (and to access unexpected opportunities).
But there’s no point in investing in any of these products IF you don’t make that extra Available Cash work as hard you do.
Money has a nasty habit of evaporating
You’ve probably heard the story of the lotto winners who won a fortune – and yet were broke again 2 years later.
Winning a big business contract is like winning a lottery – it opens up BIG opportunities.
It’s likely that there’s some small business in your circle where the owner won a great new contract, and two months later was struggling to find the money to deliver the job because it had evaporated in the mean time.
It’s all too easy (and too human) to get caught up in getting the next job done and forget about the core foundation of good business – administration.
This is one of the things I always check on when I’m developing a Working Capital Strategy for new clients – how are they going to maximise the returns on their finance investment?
A thriving business needs a firm foundation – good business administration practices that make sure that cash isn’t leaking out of your business.
Good administration = good business
Increasing your business success is ALL about administration – what happens in the back offices matters A LOT.
Getting better Cash Availability using smarter cash flow finance tools can be a bit the same – it could be the worst thing in the world for your business UNLESS you run your administration as well as you do your operations.
If you do, Responsive Finance can really help you to grow your business, improve its efficiency, and better manage the disruptions of these uncertain times.
However, like those stories of lottery winners who are broke 2 years later, it’s all too easy to leak your cash away.
What IS good administration?
The full list varies depending on the business – but it starts with good cash management.
- Managing your outstanding invoices
- Managing your expenses
- Managing your operational costs
I’ve written about the core practices of good cash management in my free SURVIVING CASH FLOW CHALLENGES ebook.
The other administration components you need to manage will depend on your business. From what I’ve seen:
- In construction, it’s all about contract administration – the process of estimating a job, planning the job and delivering on time and on budget.
- In plumbing, it’s about managing your component availability, so that your team has everything they need when they go to site.
- In manufacturing, it’s about inventory management and preventive maintenance – so you can keep to your production schedule without building up too much old stock.
Administration doesn’t have to be manual
Today, good administration practices aren’t just about hard work. They’re also about using smart technology to improve your back office process.
Today there are a range of great administration and automation tools that can make your back office work smarter and easier.
Put the right tools together into a robust process and your business will run a whole lot smoother.
For example:
- Make sure you’re making the most of your accounting software. Products like Xero have WAY more reporting and monitoring capability than most SMEs use. Get all your invoices and purchase orders entered and you can then do cash flow projections to help plan major expenditures.
- Today’s task and project management tools can also help you run your business better (Monday.com is a product that my go-to business efficiency colleague regularly recommends)
- Find tools to smooth your cash flow – like LucaPay’s 4-instalment payment finance – which you can use at “both ends” – for paying bills and to ALSO win more customer orders.
Responsive Finance DOESN’T solve poor administration
The right Working Capital Strategy using the right Responsive Finance tools can take your well-run business to a whole new level. It can create resilience in times of disruption. It can open up innovation and enable you to take new opportunities.
However, if you don’t have good administration, it could just end you up in a deeper hole.
If your foundations are strong, then that means you will be able make good use of Responsive Finance to increase your resilience and grow your business. To find out what’s possible for your business schedule a call with our Working Capital Strategist Martin Cattach today.
