Those in the Midlands service sector might well be starting the year with a smile. The Birmingham Chamber of Commerce Group’s last quarterly economic survey for 2012 issued last week showed the region’s service sector export sales had risen to 40 per cent, compared with 30 per cent in the previous quarter. This is quite an achievement when media reports elsewhere suggest that UK service sector activity as a whole fell for the first time in two years in December.
It wasn’t such a good picture for West Midlands manufacturers as the Chamber survey found UK sales fell from 37 per cent in the previous quarter to 33 per cent. And only 16 per cent of those manufacturers were reporting an improved cash flow compared with 31 in the previous quarter.
As regular readers of this blog will know, I believe cash flow is king for any business from large manufacturers to SMEs and start-ups. It’s vital to keep the money rolling in by staying on top of creditors and being aware of when major expenses will hit the business.
Reliable management information is a must if you are to keep on top of cash. You need a budget for your business, forecasting sales and expenditure, so that you can keep a long term eye on your cash flow and spot any potential cash black holes. Without this, you are running blind and don’t spot the problem until it’s too late. Getting on top of your management information can all seem a bit daunting for the business owner but there are business tools around to make life easier.
On-line accounting services - like Xero online accounting- are now so widely available and user friendly it’s easy to see why small businesses might want to use them.
Apart from taking the headache out of time consuming and complicated processes, there’s a huge business management benefit to web-based (cloud) computing. Real time data can easily be shared with your accountant and with their advice you can make decisions based on what’s happening now, not what happened 3, 6 or maybe even 12 months ago.
Cloud based services can also improve your bottom line with a reduced need for investment in hardware, IT infrastructure and in-house IT support, while offering the ability to access data from whatever location you want and enabling employees to work remotely.
Using Xero online accounting via our Business Edge Service allows us to offer a truly proactive accountancy service to clients and achieve our goals of helping clients make more money, pay less tax and retire earlier.
Chartered Accountant, Birmingham