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Money Management Tips for SME Owners

Owning a small to medium sized enterprise (SME) here in the UK brings with it a unique set of challenges and, over the past couple of years, these challenges have increased, largely as a result of the uncertainty over Brexit.  Despite the fact that the date for the UK to leave the European Union is almost upon us, most of us are none the wiser about what this will mean as the government has yet to negotiate a favourable divorce deal with our erstwhile partners in Europe.  This makes it more vital than ever for SME owners to be watchful and harbour their resources so that they are ready to weather the Brexit storm when it happens.

One way of facing the aftermath of Brexit with confidence is to make sure that your company’s financial health is in tip top condition and that you won’t be met with any unpleasant surprises that will have a negative effect on your business and, perhaps, push it into debt.  Looking after your business finances can be easier if you follow some great, everyday habits that can help to manage your money effectively.  We have some tips to help you make sure your finances are stable as we approach Brexit.

  • Pay your bills on time – credit card or loan fees can be expensive if you’re late paying.  However, you also need to keep in mind that paying late fees on vendor and utility bills can add up to quite a sum, despite the relatively small cost.  Set monthly reminders to make sure none of your business bills are being missed, especially if your profit margins are slim.  Avoiding consistent payment of late fees can mean the difference between ending the year in the black or in the red for some small businesses.
  • Be frugal – to try to save money on your ordinary business expenses.  Follow up on any rebate offers for equipment and supplies and consider buying office furniture and other major equipment second hand, if possible.  When it comes to utility bills, get into the habit of switching off lights and equipment that are not being used and get that dripping tap fixed (it will save money on the water bill in the long run).
  • Negotiate -when buying from vendors or contracting with suppliers, negotiate for a better deal before signing a contract.  Make sure you examine all the terms and conditions, such as late payment penalties, before making a firm decision and signing on the dotted line. 
  • Securing payment – from clients in a timely manner is vital for small business success.  Set up a process for chasing funds owed to your company so that you take action as soon as the money is overdue.  Securing prompt payment from clients can mean the difference between success and bankruptcy for some small businesses.  If you’re having trouble collecting money owed to you, get in touch with a debt recovery agency that offers a no-win, no-fee service as this is the most cost-efficient method of recovering debt available to SME owners.