Tips on How To Manage A Small Business.The management of payments and collections is an essential activity in the SME, since it allows to have a good cash flow that guarantees the correct operation of the business . Collections management refers to the planning and control of payments that the business has pending from customers, while payment management involves receiving invoices from suppliers and making sure they are paid in a timely manner.
10 Tips on How To Manage A Small Business.
- Carry out a customer solvency study. Before closing any sale, it is convenient that you analyze the creditworthiness of your potential clients to reduce the risk of defaults or late payments. Business reports, public records and delinquent records will allow you to get an idea of the economic muscle of other SMEs.
- Establish an incentive system for prompt payment and penalties for delays. To encourage your customers to pay quickly, you can discount invoices and apply surcharges for delays in paying them.
- Determine a payment schedule. If you have a small business, setting one day a month to make all the payments will facilitate this task, at the same time giving the suppliers confidence, since they will know exactly when they will charge.
- Use management software. To facilitate the management of payments and collections, it is best to use software that allows you to automate all these operations. This technology usually has an alert system that will notify you of when you must make and receive payments, in addition to indicating the overdrafts and expenses that have passed to your account. The most complete programs also allow you to take payroll payments, tax settlements, loans or payments to Social Security. So you can have a global image of the state of the Treasury of your business.
- Create an emergency fund. The report of the Multisectoral Platform against Delinquency indicated that the public sector takes 68 days to pay and the private sector 81, deadlines far removed from what the law establishes. That means it is better to prevent and have an emergency fund to deal with possible late payments. So you can continue working normally, without having to resort to loans or incur defaults.
- Develop a solid business plan: A business plan will help you define your goals and objectives, identify your target market, analyze your competition, and create a roadmap for achieving success.
- Keep track of your finances: It’s important to track all of your income and expenses, create a budget, and regularly review your financial statements.
- Build a strong team: Hire employees who share your vision and have the necessary skills to help your business grow. Encourage open communication and foster a positive work environment.
- Focus on customer service: Providing excellent customer service will help you build a loyal customer base and attract new customers through positive word-of-mouth.
- Embrace technology: Use technology to streamline your business processes and increase efficiency. This can include anything from using accounting software to managing your social media presence.
- Stay organized: Use tools like calendars, to-do lists, and project management software to help you stay on top of your tasks and prioritize your work.
- Stay up-to-date on industry trends: Keep up with industry news and trends to stay ahead of the competition and adapt your business strategy as needed.
- Network: Attend industry events and conferences, join professional organizations, and connect with other small business owners to build relationships and gain valuable insights.
- Take care of yourself: Running a small business can be stressful, so it’s important to take care of your physical and mental health. Make time for self-care and prioritize your well-being.
- Be flexible: Be willing to adapt and make changes as needed to meet the needs of your customers and stay competitive in the marketplace.
