The financial profile of your business is the first place people will look to gauge an early reading on the health and success of your business. Your finances show if your business is growing, how resilient it is and whether you are in control of your financial affairs.
If you have a specific thought in mind about your credit, use the links below to jump to a section.
- How profitable is your business
- Monitor your cash flow rating
- Keep on top of your filing
- Manage your security
- Keep implementing actions
- Check your outcomes & validate your work
1. How profitable is your business?
Turnover is vanity, profit is sanity. Never has this been truer and since the 2008 credit crunch the requirement for liquidity in your business from lenders, trade creditors and other people assessing your business finances has increased. Everybody wants to make sure they get paid and they want to ensure that at any given point in time you have the means to do that.
For many businesses this hasn’t been an issue as the general appetite for debt has diminished with any growth coming from organic reinvestment of profit into business growth. As we start to enjoy some of the green shoots of recovery in the UK economy it’s worth being clear what expansion means for the underlying profitability of your business and what impact that could have on cash flow.
2. Monitor your cash flow rating
Turnover is vanity, profit is sanity, cash flow is reality. Operating profitably is more critical than ever but inevitably all businesses go through cycles of strong and weak cash flow and this can put real stresses on a business and its owners.
Your FD, accountant or financial advisor can help you with cash flow forecasts helping you identify the cycle of cash in your business and help you identify potential issues before they arise so you can either make borrowing arrangements, adjust staffing levels or ramp up marketing activity to overcome any lulls in sales.
3. Keep on top of your filing
When you’re caught up in the day to day of running your business filing your annual accounts are often seen as a distraction and an inconvenience. However, they are actually a key lever in your armoury to highlight the positive performance of your business.
Young or new businesses can benefit from filing early accounts as it provides early evidence that your business is viable, solvent and generating sales and profits to Credit Reference Agencies. This evidence can boost your business credit score and unlock access to better payment terms and potential finance options.
Similarly, rapidly growing businesses can formally demonstrate that growth and make use of the opportunity that comes with it.
It’s always worth checking with your accountant or financial advisor before submitting partial or early accounts as there are certain conditions around how early and how often you can file accounts.
4. Manage your security
Your Handle security rating helps you understand how your various assets, property, machinery and stock etc. stack up against any liabilities you might have. Regardless of whether you want to secure debts against any of your assets maintaining a strong ratio between the two is a useful way to add flexibility to your business finances should you need a significant cash injection.
5. Keep implementing actions
Included in your finance report is a list of three actions to take forward. These actions are bespoke to your business and are there to link you with resources and information to help inform your next step.
Once you have undertaken these actions, the noted button can be clicked to show that you have completed that particular action. When your report refreshes you will be able to see how these actions have affected your overall score.
6. Check your outcomes & validate your work
Your Handle finance report refreshes each month, making it easy for you to check how the new agreements or updated account changes you have affected your individual metrics. If you outsource support you will be able to see if the investment you made has improved your score. You will be notified each time your report refreshes, making it a reliable and easy way to track your progress, identify weak points and keep on top of your business's financial health.
If you have any questions about any of the data in your Handle finance report, please email [email protected] with some details and we’ll take a look for you.