While it may not always appear to be the case, banks are generally very keen to lend money to businesses. However, due to stringent guidelines and red tape, it can seem quite difficult to actually get credit approval. Maintaining a good relationship with your bank can be the key to this. Here are some simple tips to help your business (particularly your finance department) improve this relationship.
Change Your Mind-set
Dealing with the banks is a state of mind.
All too many business owners think that the battle is won once the marketing rolls out and the product is sold. They see that their investment of time and resources has paid off and therefore, assume that their goal has been achieved.
However, the fruit of these hard-won victories will quickly run out if the accounts receivable, as well as the accounts payable, is not carefully maintained with a structured cash-flow management plan.
Ask any bank manager who their worst customers are and they will quickly tell you: the people who have no idea what is going on in their business. Some customers ask for finance or expect to maintain an overdraft, yet they cannot even produce up-to-date accounts!
As a business grows, it will need to delegate key tasks to experienced and qualified team members. The areas the business owner will seek help in first will be determined by the focus and needs of the business;
Despite some analysts’ grim financial forecasts, 2016 can be a year of exponential growth for your business. The key is to think big and to think outside the box.
Instead of making a list of all the ways you can cut back, make a list of all the ways you can increase your revenue tenfold. Once you have done this, narrow it down to the best three.
Now, you will need a plan of action.
In today’s business world, the job of a CFO is not simply to keep track of a company’s cash-flow but also to find ways of improving it. The CFO analyses accounts and contracts, identifies those which are reaping returns, those that could reap better returns and those which should be pruned. In other words, the modern CFO is not just a “bean counter” but a “bean grower,” as well.
Although the CEO may be in charge of drawing up the big picture,
The CFO Centre has developed a quick and efficient tool for rating your company’s finance function: the ‘F Score’ test. This test takes around 7 minutes to complete, covers the 12 key areas of your finance function and provides you with a detailed eight page report.
The purpose of this report is to provide you with your ‘F Score’ profile, from which you will learn about the role of the finance function in the wider context of your business as well as highlighting key areas where significant and valuable improvements can be made.
Rolling Back The Years…
The comedian Barry Cryer tells a story about a Finance Director walking down the street. The FD is approached by a homeless man. “Excuse me, mate” says the man “can you spare me a few quid, I haven’t eaten for two weeks”? “ I see” says the FD “And how does that compare with the same period last year”?
Of course, no FD would be that heartless but the story also hides a deeper truth – most of us think in fixed periods of time,
You might well know how to grow (i.e. do more of the things that are working for you, and do them better) but as a seasoned entrepreneur, you tend to instinctively want to hold back a bit…
It’s chiefly a case of paranoia…
Business owners tend to be more paranoid than they let on. They don’t like to be regarded as paranoid so they often hide it.
What are the causes of success?
Colin Mills – Founder & CEO, The FD Centre Limited (www.thefdcentre.co.uk)
So, to be a highly effective FD in your business, you have to be up to date on all the latest accounting standards, be really up to speed on the latest developments in tax legislation and spend long hours in your office reviewing reconciliations and signing off VAT returns. That’s right isn’t it?
Our experience over ten years suggests that highly effective FDs need a rather different set of skills to be effective and “make a difference” in the businesses they work for.