Improving your business finances does not always require a complete overhaul. A few focused changes can make a real difference to cash flow, profitability and the amount of money available to invest back into the business.
Here are ten practical actions you can take this month.
1. Review what you are charging
When was the last time you reviewed your prices?
Supplier costs, wages, utilities and insurance may have increased since your pricing was set. If your prices have remained the same, those additional costs will be reducing your profit margin.
Review your most popular products or services first. Calculate what they cost to provide, including the less obvious expenses such as delivery, administration and staff time.
You do not necessarily need to introduce a significant price increase across the board. A small, carefully considered adjustment could improve your margins without making a noticeable difference to customers.
2. Look at your payment terms
Long payment terms can put pressure on your finances, especially when you have already paid for materials, stock or wages before receiving the money owed.
Check the payment terms you currently offer and consider if they still work for the business. You may be able to request deposits, introduce staged payments or shorten your standard terms for new customers.
Make sure invoices clearly show the due date and payment instructions. Sending invoices promptly also gives customers fewer reasons to delay payment.
3. Follow up overdue invoices
Late payments can quickly create a gap in cash flow. Set aside some time this month to review your outstanding invoices and follow up anything overdue.
A clear and polite reminder is often enough. It can also help to send reminders shortly before an invoice is due, rather than waiting until the payment is already late.
If chasing invoices regularly takes up too much time, consider using automated reminders through your accounting software. This keeps the process consistent without adding another task to your week.
4. Cancel costs you no longer need
Small monthly expenses are easy to overlook, particularly subscriptions that renew automatically.
Review your bank statement and card payments from the past three months. Look for software that is no longer used, duplicate services or contracts that could be renegotiated.
Do not focus only on cutting costs. Some services save time or help generate income and may be worth keeping. The aim is to remove spending that no longer provides clear value to the business.
5. Check the true cost of your current finance
If your business already has finance in place, review what you are paying and how much time remains on the agreement.
Look beyond the monthly repayment. Check the interest rate, fees, total amount repayable and any early settlement conditions. An agreement that was suitable when you took it out may no longer be the right fit for the business.
Refinancing could potentially reduce monthly commitments or replace several repayments with one more manageable agreement. However, it is important to compare the total cost and not make a decision based on the monthly figure alone.
6. Prepare a short-term cash flow forecast
You do not need a complicated spreadsheet to get a clearer picture of the next few months.
List the money you expect to receive, when it is likely to arrive and the payments the business needs to make. Include wages, supplier bills, tax, rent, existing finance and any planned purchases.
A simple forecast can highlight potential gaps before they become urgent. It also gives you more time to reduce spending, chase invoices or arrange additional working capital if required.
Update it using actual figures as the month progresses. The more regularly you do this, the more useful and accurate it becomes.
7. Review how customers buy from you
Increasing revenue does not always mean finding a large number of new customers.
Look at what your existing customers purchase and consider if there are other products or services that would genuinely benefit them. You could introduce bundles, ongoing support packages or maintenance plans where appropriate.
It is also worth contacting customers who have not purchased recently. A personal check-in could restart the conversation and uncover a requirement you were not aware of.
The focus should be on making it easier for customers to buy something useful, rather than pushing them towards something they do not need.
8. Identify what is slowing the business down
Time-consuming processes carry a cost, even if that cost does not appear as a separate line in your accounts.
Think about where work tends to get delayed. It could be manual administration, outdated equipment, slow systems or a lack of capacity within the team.
Work out how much staff time is being lost and what that means financially. An investment in new software, equipment or additional employees may cost money initially, but it could allow the business to complete more work and improve customer service.
This is also where funding can be useful. Spreading the cost of an investment may allow you to make the improvement now without using a large amount of working capital in one go.
9. Check that you are using the right type of funding
Different funding options are designed for different situations.
A business loan could support a planned project or provide working capital. Asset finance may be more suitable for equipment, machinery or vehicles. Invoice finance can help businesses access money tied up in unpaid invoices, while a revolving credit facility can provide flexible access to funds when required.
Using short-term finance for a long-term purchase can create unnecessary pressure on monthly cash flow. Equally, taking a large fixed loan when you only need occasional access to funds may not be the most suitable approach.
Review what the money is for, how quickly it could generate a return and how you would prefer to repay it. This will help narrow down the options that are likely to suit your business.
10. Set one clear financial target
It is easy to say you want to improve cash flow or increase profit, but a specific target is much easier to act on.
Your target could be reducing overdue invoices by a set amount, cutting unused monthly costs or building a cash reserve. You could also aim to refinance an expensive agreement or secure funding for a project that has been delayed.
Choose one priority for the month and decide what action needs to happen each week. Keeping it focused makes progress easier to measure and gives the business a clear financial goal to work towards.
Small changes can make a noticeable difference
You do not need to complete all ten actions immediately. Start with the areas that are likely to have the greatest impact on your business.
For some companies, that will mean collecting outstanding payments. For others, it may be reviewing costs or finding a more suitable way to fund future plans.
OnSite Finance can help you review the funding options available and understand the costs involved. There is no obligation to proceed, giving you the information you need to make a considered decision for your business.
