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Cashflow Management

Let’s talk money!

Have you ever heard it being said “if you can’t manage R1000, you won’t manage R100 000”?

Yup, that’s it! Managing your cash flow is basically tracking how much money is coming into, and out of your business. However, profit does not equal to cashflow. Cash flow is one of the most important components that makes the business successful, like many say…it is the blood that keeps the heart of the kingdom pumping! 

Businesses that have more cash going out more than it comes in completely die or get into debt they could have avoided. 

Back to Basics. 

You should be tracking your cash flow either weekly, monthly or quarterly. There are essentially two kinds of cash flows:

1️⃣Positive cash flow: when money coming into the business through sales for instance, is bigger than the money leaving business by means of salaries, expenses, etc.

2️⃣Negative cash flow: when money leaving the business account is greater than the money coming in. This screams TROUBLE for the business. 

Understanding cashflow 

Simple example: company x renders your services in May, and you invoice them on the 31st of May. Company x only monetise the invoice in around June-July, whilst you had salaries to pay. Thus cash outflow exceeded cash inflow in May. If many other customers continue to do this, you can almost see how your company could run into cash flow issues.

The cash flow statement basically records all of the organization’s cash inflows and outflows, and includes cash from operating activities. The cash flow statement is divided into three parts: investing, financing, and operating activities. Failure to manage this cash can lead to problems. 

We have mentioned the poor cash management may lead to cashflow problems or bankruptcy, but here are some of the causes:

1️⃣Poor understanding of the cash flow cycle – not having a clear understanding/ timing of cash inflows and outflows from the business. E.g. when to pay for accounts payable (what you owe to suppliers),etc.

2️⃣ Lack of understanding of profit versus cash – a business can be generating profits on its income statement and be burning cash on the cash flow statement.

3️⃣ Lack of cash management skills – it is important to acquire the necessary skills to manage your finance. If you are looking for this service, do get in touch with us! 

As they would say, successful financial management involves balancing 3️⃣ elements:

accounts receivable (what you are owed by the customer), accounts payable (what you owe to suppliers), and shortfalls (the amount of money you owe that exceeds your available funds). Make sure  one element doesn’t overtake the others. 

If you can’t afford to pay someone to do this for you, you can do it by yourself. Here are 7️⃣ tips to manage cashflow:

1️⃣Have an emergency fund 

2️⃣Encourage early payment from clients 

3️⃣Put cashflow over profit 

4️⃣Assign someone to monitor your cashflow 

5️⃣Drive and/ or boost sales 

6️⃣Reduce expenses where possible 

7️⃣Finance purchase orders 

An example..

To hire employees or outsource?

At some point as an entrepreneur growing a small business, this is a decision you will have to make. You cannot do everything by yourself (forever), the more clients you get, the more hands and brains you will need. firstly, what does hiring mean, what responsibility does it leave you with, and even the pros/cons of bringing in independent contractors? This blog will contrast.

According to the Black’s Law Dictionary, an employee is a person who works in the service of another person under a contract of hire, which gives the employer the right to control the details of work performance, while a self-employed (herein Independent Contractor) is a person or entity contracted to perform work for—or provide services to—another entity as a nonemployee.

Now the question is, flexibility or responsibility?

Both contracts have their own Pros and Cons, which we discussed below:

Pros and Cons of hiring an employee:

Before bringing onboarding anyone, you need to understand that extra manpower comes with an array of legal obligations, liabilities, expenses, and paperwork. It’s important to consider hiring when your business is ready for this step, as it comes with responsibility: high turnover, absenteeism, higher healthcare costs, workplace violence, theft, etc.

fig.1. Pros and Cons:

ProsCons
You get the advantage of being able to completely control and direct that person’s work during work timeEmployees come laws and regulations from the federal government and your state regulate the payment of wages or salaries, overtime, etc
Train the person in the way you want the job done.You must also comply with payroll tax requirements.
Require that person to work only for you.And other responsibilities such as payment of unemployment insurance and worker’s compensation insurance.

Pros and Cons of outsourcing independent contractors

This means you will have less time dictating on training, management, and supervision so that you can focus on other tasks and demands of the business.

We have said this previously, having employees means having fixed costs. This particular contract gives you a great competitive advantage, controlled costs, and increased reach. You can get access to capabilities and facilities otherwise not accessible or affordable while saving costs.

fig.2. Pros and Cons:

ProsCons
You have few reporting or tax responsibilities.You can assign duties and impose a deadline but you cannot tell them how to get the job done.
You must report the amount you have paid them each year, but you don’t have to pay FICA taxes. They can work for others and often set his or her hours of work.
Their payroll responsibilities are significantly less than for an employee.

At the end of the day, it all boils down to at what level is your business, hiring is quite a big responsibility. We have talked about this on a blog before that hiring interns helps too. Before you make that decision, you need to have honest money conversations with yourself, the extra time for supervision, etc.

It’s not a train smash if you cannot afford to hire a recruiter to help you find the right talent, you can conduct the interviews yourself, but you also need to prepare yourself to make sure you get as much information as possible and ensure the interviewee is culture fit. All the best if you are about to make that decision, we hope that you found this insightful and that it helps you make an informed decision.

Guide to hitting Online Sales.

Landing here, our assumption is that you’ve read our previous blog on “Going Digital”!? If you haven’t, you can catch up ⏪ this blog article is more of a continuation ⏩



We believe in continuous learning, hence we are consistent in adding to your knowledge with our weekly blog posts. If there’s any specific topic you would like us to cover, feel free to drop us a comment or shoot us a DM on our socials @accasesolutions. Ok, let’s get to it!

Now that you know what does “Going Digital” means, WHY go digital, and HOW to go digital, let’s help you get started with a proven strategy that has helped marketers sell through digital platforms. In this blog, we will focus a bit on marketing and making sales online.

Rule number 1: Don’t ignore what people want, give it to them. DO NOT neglect customer needs! Second to that is knowing how to communicate your value by teaching your customers about your products/services and sticking to the mission!

Developing a digital marketing strategy
1️⃣ Define your goal.


There are 2️⃣ types of goals
☑ Ongoing – overall focus on marketing (long term)
☑ Campaign goals – specific initiative and short term

The common include:
• Improving customer engagement
• Generating more leads
• Growing sales
• Increase traffic
• Expand reach
• Enhancing brand perception


Choosing the right channels
“You need to be active on every social media platform” is a myth and bad advice. Invest in a smart mix of channels. Choose the ones that make sense for your audience.

A business should be centered around your ideal client avatar. You need a comprehensive customized strategy that’s proven to work in your industry.

Try the following:
• Research the channel’s audience
• Review research studies – source: business insider, social media today, etc.
• Discover how channels affect distinct

Facebook – 2.4 billion active users offer a lot of business features.
Instagram – 500 million active users, visually based. The online mall
Twitter – top messaging platform. Ideal for trending conversations
LinkedIn
• Top professional networking site
• Ideal for connecting with industry experts
• Great for B2B marketing
YouTube- top video sharing site. Business & influencers can create channels & monetize.

Creating content
Crafting messaging – Identify valuable content
Choosing topics – relevant topics that aren’t always marketing but also entertaining, educational, and value-driven, also align with your business goals


Selling on social media


“Your brand is what people say about you when you’re not around, so it’s built through sales and that means getting an experience with you.”

Stories sell!! To get to people’s wallets, you first need to get them to their feelings. That’s the hook!

> Customers trust people over brands
63% of customers trust influencers vs brands…reaching customers that trust opinions of that person
> Influencer partnerships (sponsored) – Paid endorsement of product or service
> REVIEWS – sending free products for reviews
> Co-branded – Influencer & company cooperate on product marketing, then share resulting sales
> Paid advertising – purchasing exposure to certain audiences & preferred placements. Start with a test campaign – AB Testing


When it comes to Customer Service, give INSTANT RESPONSES. Use platforms like Keyhole and Mention, be sure to make your message sounds humane. Turn on notifications, or look through manual searches.


To conclude, we leave you with the following tips:
• Algorithms change every 1 or 2 months, stay up to date.
• Customer service is important!! When people enquire from you, they already have other options. Be the best option!
• Take things personally instead of seeing them as a problem-solution equation.