5 money processes you need now in your businessApr 17, 2022
By Jen Blandos, Female Fusion
I hold my hand up, math is not on the list of skills I do well - I failed high school math and I have dyscalculia, which is like dyslexia, but with numbers. So as a business owner, the money side of things was probably one of the hardest areas for me to get my head around. In my first business, I had someone else do the books for me, and I just focused on bringing in the business. The problem was that I lost money, because I was not looking at the books consistently.
I promise you, if a girl who is dyslexic with numbers can figure it out, you can too! One of the first things you need to do as a business owner is get your financial processes in order. These are my top five tips to get on top of your money in your business.
1. Accounting software
If you have a trade license for your business, you need a way to keep track of your money. Some business owners will start off with an Excel spreadsheet, but it can be open to human error and it’s tricky to fully track your business progress.
With accounting software, with even the most basic functions, you can issue invoices, track your expenses and see how much your business is really making. Once you’ve set it up, it will also save you time running your business.
Popular accounting software for small businesses in the UAE include: Zoho – which is offered free with banks such as Mashreq, Quickbooks and Xero.
If you’re in the UAE, we’ll also have corporation tax staring in June 2023, so it will become essential that you stay on top of your money – as there might be an obligation for every business to submit tax returns, even if they don’t meet the threshold.
2. Invoicing processes
We love a good process at Female Fusion, and we invest a lot of our time in getting the systems just right to run our business. Money systems and processes are probably one of the most important systems that you can have in your business, or at least a consistent way to do them, so you are not losing money. These are areas that you should be thinking about so you can get paid on time:
Pre-invoicing: what do you need to have in place to issue an invoice? Do you need a purchase order, do you need to sign up to a procurement system, do you need to submit any documents before you can actually invoice? Make these questions part of your customer onboarding process, because sometimes the person you’re dealing with won’t always know, and if you deliver a service or product without completing this, it can add extra time onto when you’ll actually get paid!
Contracts: do you have a contract for your customer or client to sign? Have you indicated what jurisdiction will cover your agreement? If you’re based in the UAE, it’s often recommended to try and get either ADGM or DIFC listed as the jurisdiction because they have a very quick dispute resolution process in place, and you can file a claim online. If you’re selling online, also ensure that you have terms that are legally correct for the countries you’re operating in. If you do not have a service contract or website terms, don’t copy one off of the Internet, this is where you need to make an investment and pay a lawyer to help you create them.
Payment terms: agree in advance with your customer or client what the payment terms are. Don’t just send an invoice and say due in five days, without confirming that payment will be made in five days. Being clear up front about payment terms makes it much easier to collect your money.
Invoicing: if you agree a service, or to supply a product, ensure that you issue an invoice for it. I cannot tell you the number of times that I’ve agreed a service with a small business, to only have them not invoice me. Sometimes I have to chase multiple times. I have also received chases from suppliers asking for payment, even after the invoice was paid and I had shared a proof of bank transfer. This goes to show that as a business you have zero systems in place for your money management.
These are often the same businesses that I see complain that they are having financial problems. If you do not have the time to issue invoices, or it’s not in your zone of genius, hire an assistant, or even a part-time bookkeeper to do this for you. This is harming your business and your business’ growth by delaying cashflow into your business.
3. Make it easy to get paid
Whether you’re issuing an invoice for services or if you’re selling products at a market, make it easy for people to pay for you. This means digital payments. If you issue an invoice, put your full bank account details on the invoice. If you’re using invoicing software, this is automatically generated. Even better, integrate your payment gateway into your invoicing software so if a customer wants to pay by credit card they can. If you don’t know how to do this, check with your invoicing software company, they will normally have video tutorials showing you how to do this. It really only takes a few minutes to set up.
If you aren’t set up for digital payments, why not? It’s so easy to set up and will enable you to collect money right away. Our favourite is Stripe because it integrates with most website platforms, it has a great dashboard to let you track your payments and you can get approved for an account very quickly compared to other payment gateways available on the market in the UAE. If you’re in the Fusion Circle, we get great rates for our members with Stripe, which can be thousands of dirhams in savings each year. Do feel free to reach out to us for more information on [email protected]
4. Collect what’s owed to you
Debt collection is one of the most frustrating things for business owners. If a client or customer doesn’t pay the bill, you need to have a process in place for how you deal with that. If you have cited ADGM or DIFC in your contracts, it will make it easier to collect, but hopefully you won’t get to that point. Your payment collection process should have taken into consideration all of these points:
- Agree on payment terms
- Follow-up with client or customer if payment terms are not met
- Follow-up regularly, but politely until the invoice is paid
- If the customer or client can’t pay you, try to come up with a payment plan to get the money paid
- Refer to ADGM or DIFC courts for collection if the client doesn’t pay your invoice, this would normally be 30-45 days after late payment
5. Know your numbers
If you’re not savvy with numbers, this is where an accountant or bookkeeper can come in handy. All business owners need to know the financial health of their business so they can make the decisions they need to grow their business.
At the very minimum, you should know how much money your business makes each month, what your expenses and costs are, if you are spending too much or not enough, how much you’re selling, and if you’re making enough profit from your sales. Get into the habit of reviewing this information monthly, as it will help you better run your business.
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