For your business to thrive, your cashflow needs to be as healthy as possible. Maybe this sounds obvious, but that doesn’t make it any less true.
Creative agencies like yours need money in the bank. How else would you pay for the best equipment to deliver your work? Or even pay your bills?
If you’re having a bit of trouble with your cashflow, there are steps you can take to stop these problems dead in their tracks.
Here are some tips to avoid cash flow problems.
Budget, budget, budget
Times are hard at the moment, not just for the creative industry but for the country as a whole. With that being the case, keeping track of and maintaining a budget can be the saviour your agency needs.
Planning is everything; the main part of a budget is the planning stage. So, we recommend creating cashflow forecasts. While a forecast won’t be 100% accurate, it’ll give you insight into how much you’ll potentially take in and payout.
Do this by looking at your previous performance reports and using them as a basis for the months ahead. Remember, the further you forecast, the less accurate it could be.
Once you have a forecast, you can plan and budget for your upcoming tax bills and regular payments (utilities, subscriptions etc.).
Assess your outgoings
Talking of subscriptions, are you using every bit of software you’re currently paying for? If not, why keep them? Creative software programmes are updated fairly regularly, so sometimes that shiny new design package can become obsolete rather quickly.
Signing up for a new software package and forgetting about cancelling the old one can be easy. It happens all the time – but there’s no need to panic. Go through all of your subscriptions and think whether you really need them.
And what about the stuff you do need? Chances are that you’ve been paying your bills or buying office supplies and haven’t considered shopping around for a better offer.
That design suite that looked so good a couple of years ago may not be doing the job anymore. You could find a cheaper deal elsewhere (especially if the provider has an introductory price or discount). It’s always beneficial to look for the best offer available.
What good’s your work if you have to wait ages to get paid? Having a client dawdle around waiting for a convenient time for them to pay you can be a pain. Not to mention a pretty harsh blow to your cashflow.
This is where streamlining comes into play. By integrating your invoice system with cloud accounting software, you can schedule invoices to be sent as soon as the project’s completed. Hopefully, this will prompt your clients to pay sooner rather than later.
You could even retain your finished product for your client until payment has been made, but that’s entirely up to you.
You may not realise it, but outsourcing some of your accounting functions can also positively impact your cashflow.
Consider this. How much does recruiting, training and retaining an employee cost you? The likelihood is that it’ll be much cheaper just to pay an accountant to do things for you. By saving this money, you can plough it straight back into your agency. It really is that simple.
Keep that cash flowing
There are several steps your creative agency can take to improve its cashflow. But, shifting focus from your work to managing the business’s finances can be counterproductive for your agency. What if there was a firm that could do it for you? Well, there is. Us.
We work closely with creative industries and help them take control of their cashflow. If you think we could offer you this support, get in touch.