Small business software is an essential tool for any business and we have two examples of excellent software designed for good business management.

Business management software would include forecasting software and business software designed to improve profits together with having a good business plan, which does not necessarily have to be produced using software.

Forecasting software

Cash Forecaster is great easy to use small business software designed for cash flow and profit planning. If your small business needs a quick projection for the next 12 months then you could purchase the Basic Version.

However, if you are looking for some longer-term financial projections then other versions will forecast for three, five and seven years forward.

It is important to have an excellent tool to project those cash flow highs and lows that running a small business has.

Many small business owners think to use forecasting software only at a time when they are looking to raise finance or to borrow from a bank, but this is not the case. All small businesses should have a business plan with a detailed cash flow forecast attached.

Profit improvement software

Another element of running a successful business is to manage the profits and to work on ways to increase those profits. Understanding the business Key Performance Indicators and the 7 ways to grow the business is half of the journey to having a truly successful and profitable business.

Understanding how to increase business profits aligned to projecting profit and cash flows of your business will be like having a Satnav (GPS) to direct your journey to a chosen destination.

This might sound a little abstract, but if you understand the importance of using an efficient tool for your car journeys, i.e. a Satnav (GPS), so that you do not waste time getting lost on the way, save fuel and arrive on time, then you will understand how important it is also to have the rights small business management software too. By having the right small business software, your business will not get lost on the way, save money and arrive on time at your chosen profitability level!

Does your business require a cash flow forecast or are you planning to set up a new business or are you planning to raise some cash from investors or the bank?

Our Cash Flow Forecasting System is easy to use and takes the hassle out of preparing the essential cash flow forecast document for your investors or the bank. Save time and get it right and avoid the need to create Excel spreadsheets from scratch.

So whether your business is just beginning, you are an existing business that needs to raise cash for expansion or perhaps you are in a cash flow crisis our Cash Flow Forecast Software will provide you with the solution for your business. Use our cash flow system to beat your cash flow crisis and to produce a cash flow forecast in minutes. Business planning made easy!

What you get with this cash flow froecasting template software:

- Prepare comprehensive monthly cashflow projections for 36 months ahead.

- Projected cash flow and income statements for your and established businesses.

- Balance sheets.

- Use it for business plans, cashflow planning and management, budgeting andfund raising.

- Breakeven analysis and overdraft review.

- Business plan software that runs as a powerful, easy-to-use template with Excel.

- You only need a very basic knowledge of Excel.

- You get a quality-built cashflow planner with more features and facilities in a fraction of the time and cost that it would take a very experienced spreadsheet user with a financial background to build from scratch!

- Prepare highly professional and presentable projections.

Our Cash Forecasting Tool is an easy-to-use cash and profit forecasting solution and business financial planner to help you gain greater control over your cashflow and your business. It has been designed specifically to help small businesses to plan more efficiently for the future and is an essential tool that every business should have!

Software for cashflow forecasts made easy! Forecasting cash flow planner with easy to use templates
Our software is probably one of the cheapest on the Internet, yet it still has all the benefits of all the other systems being sold – with our system you can forecast for one through to seven years.

Cash flow forecasting is made easy with Bowraven’s Cash flow forecast software.

Good cash flow is the key to a ‘Companies Health’ and it is the ‘Life Blood’ of all businesses.

Planning and forecasting what will happen and when it will happen is tantamount to a successfully run business, so having the tools to optimise those cash flows and being able to forecast cash flow and to run ‘What if’ scenarios with your ‘Cashflow Projections’ is key.

Having easy to use cash flow forecast software is a necessary tool for business owners and for accountants working on behalf of their client to produce professional cash flow reports.

When making decisions about how to optimise future cash flows, having well prepared cash flow forecasts to review and present to your management or to investors or the bank where your business is looking to raise finance, is a must.

Bowraven’s Financial Forecasting Software is known for its ease of use and it takes the hassle out of preparing essential cash flow forecasts. Our software will save you time, help you to get it right and avoid the need to create Excel cash flow forecast spreadsheets from scratch. Use our Cash Flow System to beat your cash flow crisis and to produce a cash flow forecast in minutes.

This Cash Flow Forecasting Software provides the solution for your business to prepare one to seven-year cash flow forecasts with professional looking reports.

If you are looking to for advice on creating a cash flow forecast then here are a few tips and pointers.

Firstly you need to distinguish between what is ‘Revenue and Expenditure’ and what is ‘Cash Inflows and Cash Outflows’.

Let me explain this by way of an example:

When you raise a sales invoice to one of your customers there are differences between how this transaction affects profit and how the same transaction affects your bank balance and when.

Let’s say you raised the invoice on 28 November 2009 and the invoice was for £1,000 (net of VAT or Sales Tax). For profit and loss purposes you would include £1,000 in the November profit and loss account, which is very straight forward and quite obvious really. However, when it comes to recording the ‘Cash-effect’ of this same transaction you have to put a little more thought into how you record it.

Firstly, if you are a business that has to charge VAT or Sales Tax then the amount that you will receive (the Cash-Inflow) will be more than the £1,000. If the rate of VAT or Sales Tax was 15% then the amount of ‘Cash’ you will receive into your bank account will be £1,150 and not the net amount of the invoice. Also, not all customers pay you straight away and in some cases customers can take months to pay you. So let’s say that this particular customer pays you in 30-days time, which would be on 26 December 2009 (forgetting for the minute that this is in fact Boxing Day!). Therefore for cash flow purposes you would include £1,150 in the December cash flow forecast – giving you a timing difference.

Finally, you would then need to include the £150 as a ‘Cash-Out’ part of your cash flow forecast when you paid the VAT/Sales Tax to your Government, which might not be until February 2010.

There are other complications that might come into play with your profit and loss versus your cash flows and you will have a similar complications associated with business expenditure and how these interact with ‘Cash-outflows’.

The best way to prepare a cash flow forecast is to spend a bit of time planning it and reviewing what actually goes on within your business. You will also need to consider any capital expenditure you might be planning and how this impacts on your cash flow and how the depreciation of these assets impacts on your profit and loss account.

Article by Russell Bowyer

There are many ways of improving Cash Flow for a business and we have given you a few ideas to do just that.

To help you see how these ideas can help your business it would be worth while doing some cash flow projections. The Cash Forecaster can be used as a management tool to identify critical costs areas of the business and how these impact the future cash-health of the business.

For example – you might like to experiment with introducing Factoring or Invoice discounting to improve the flow of cash from your customers whilst you are in expansion mode – Just because a business is making a profit it might still fail if the profits are not turned into cash – Remember ‘Cash is King’ in business!

You may have heard of the term ‘Over Trading’ – Over trading is where a business is making good sales and turnover but that it is not able to keep up with the payments to suppliers simply because their customers are late in paying the company. The obvious way to correct this is to make sure that your payment terms to your suppliers are more generous than those given to your customers. Alternatively, the introduction of Factoring will help.

Having a Cash Flow Management tool to hand will help you to explore the effect these ideas will have on your business:

1. Increase sales and in particular those involving cash payment or payment by either standing order or direct debit.
2. Reduce your direct and indirect costs and overhead expenses.
3. Consider increasing your prices and especially to your slow payers – see Bowraven’s “Profit Increase Software“
4. Review the payment performances of customers and be more selective when granting credit – start using a credit report company to check the credit worthiness of potential customers.
5. Consider up-front deposits or multiple stage payments – approach a loan company to advance the money to you and offer credit terms to customers.
6. Reduce the amount of credit given to customers and change your payments terms – i.e. reduce the time allow for customers to pay.
7. Introduce factoring or invoice discounting to accelerate receipts from sales.
8. Make sure that your sales invoices are raised as soon as the work has been completed.
9. Offer early payment discounts and consider introducing late payment charges or fees.
10. Generate regular reports on receivable ratios and aging or your customer balances and use more pro-active collection techniques – involve your sales team and make sure that any commissions are only paid where customers pay the company.
11. Consider the 80/20 rule with regards to your customer list and product lines – make sure you know where your profits are coming from. You might well find that 80% of your profits are coming from 20% of your customers or 80% of your profits from 20% of your product lines – if either of these are true consider not dealing with the 80% of customers and cancel the 80% of non profitable product lines. Be careful when do this, as it might be that certain products are reliant on others, in which case they may be ‘Loss-Leaders’.
12. Take a look at how you pay your suppliers – ask for extended credit terms. Get new quotes from other suppliers and re-negotiate prices of supplies.
13. Try to reduce your stock levels (inventory levels) and improve control over work-in-progress – make sure that you are billing work in progress on a regular basis and keep write-offs under review.
14. Sell off or return obsolete/excess stock (inventory).
15. Defer or re-stage all capital expenditure.

Planning these changes and which ones work best for your business can be done using our tried and tested Cash Forecaster.

Post by Russell Bowyer

Bowraven has recently launched it’s latest versions of the Cash Forecaster with the following versions:

- Cash Forecaster – Basic: Will forcast for up to 12-months on a monthly basis.
- Cash Forecaster – Standard: Will forecast for up to 3 years on a monthly basis for each year.
- Cash Forecaster – Vision: Will forecast for up to 5 years on a monthly basis for each year.
- Cash Forecaster – Pro and Pro Plus: will forecast for up to 7 years on a monthly basis for each year.

The latest version have been fully revised and re-vamped and include the following features:

- Forecast profit and loss and cash flows for up to 7-years on a monthly basis for each year.
- Balance sheet for the opening period and at the end of each period end.
- An option to enter up to 10 loans or hire purchase (Depending uponthe version you purchase) with a number of key features allowing you to have loan repayment holidays, interest charged to the loan or directly to the cash flow and much more.
- Up to 20 product lines with associated cost of sales lines (the number of product lines depends upon the version you purchase.
- Automatically calculates overdraft or deposit interest.
- The feature of entering flexible customer payment terms ranging from cash sales, 30-days, 60-days, 90-days and 120-days. Not only that you can allocate percentages to each payment term, as we all know customers never pay on the same date as each other.
- Flexible supplier terms allowing you to allocate a different term to each cost of sale and expense line.
- Automatic credit card charges where this is appropriate to your business.
- VAT or Sales Tax terms – the Cash Forecaster will do all the necessary calculations.
- Company tax calculator with features that allow you to adjust the profit to a taxable profit and the rate of tax and when it is paid for each of the forecast periods.
- Flexible depreciation rates and automatic calculations for any number of rates and methods that you can choose.
- Up to 30 overhead expense lines – each with its own supplier payment terms.
- Simple stock and work in progress feature.
- Factoring or Invoice Discounting option with a number of great features to allow you to see the effect of either starting or finishing invoice financing (available on the Vision, Pro and Pro Plus versions only).
- Easy income and cost of sales sensitivity analysis tool without the need to re-enter data so that you can trial various scenarios.
- Easily enter dividends or drawings by business owners and capital introduced or director/partner loans.
- Other debtors and other creditor facility.
- You can easily enter your opening balances of your business.
- Flexible headings that can be changed to suit your needs.
- Reports include an assumptions report, summary page of the forecasts which has a breakeven analysis, Cash flow forecast, profit forecast and trading summary showing the product lines, overhead report, balance sheet report, fixed asset report, loan report and VAT/Sales Tax report.

For more information and to download the latest Cash Forecaster – click here.

Small business administration is top of the list of important considerations for success in business.

All businesses have a life cycle and depending on where you are in this cycle will depend on your focus at that time. The business cycle in this context is not the economic business cycle, but instead refers to the various stages a business goes through from “Start-up” and all the way through to “Selling-up” and getting out of your business.

The stages in a business cycle

Start-up stage of a business – at this stage in the life cycle of a business the considerations and planning needed fall into how to start a small business. A well prepared business plan will see your business get off to a great start and set it off in the right direction. All too many businesses do not have a plan and find that the business flounders around without direction!

In the early stages of a business one key factor that is top of the list is managing your financial growth – there are many new businesses that end up over-trading and simply run out of cash even though they are profitable! Preparing a good cash flow forecast before you begin is crucial so that you obtain the necessary funding you need to take the business forward.

Make sure you have good debt collections so that your customers pay-up on time and in full – a profitable company with no cash-flow is a business on route to failure. Consider very carefully your payment-terms for your customers; the obvious best payment option would be cash up front or for your customers to pay by direct debit or standing order. However, this is not always possible, so you may have to give credit to your customers.

Be careful though and do not give too much on this and ideally no more than 30-days. If you are on a “Cash on Delivery” payment basis with your suppliers and you give say 60-days to your customers, it will not be too long before you run out of cash as your business expands, even where you are making a profit.

Other aspects of your business to get right from the out-set are as follows:

- Paying your taxes on time, whether this be the employment taxes deducted from your employees or if you are VAT registered or in the USA sales tax payments. Also, your Corporate tax on profits needs to be set aside and budgeted for and then paid on time.

- Insuring your business – Make sure you take out the right insurances and I recommend you register with a good insurance broker. Business interruption insurance, professional indemnity, public and employers liability insurance and contents insurance are to name a few important policies to take out and maintain. Always make sure you are up-front when completing the forms so that you never have a problem should you need to make a claim.

- Use up-to-date technology – subject to finances you should try to use the latest in technology for your industry, which will make sure your business is run efficiently.

- Registering with relevant organisations – your business sector may be governed by certain government organisations or it might be that there are some well known organisations that it would help for you to be registered with. Make sure you know who you must be registered with and who it would be helpful to be connected to create the right impression with your customers.

Managing your business on an on-going basis – As your business becomes established you will find that there are many things you will need to get to grips with. You will find in the early stages a steep learning curve is what is faced by most new business owners. So long as you get to the top of this curve and survive the first 2-5 years you should continue into the future. The stages you will go through include employing other people to do the work and getting to grips with delegation.

The problem faced by most business owners is the worry that your employees will not do the job as well as you! However, so long as they are at least 80% as good then things will be fine. If you are faced with this dilemma of the fear of employing someone to take your place in the business, then take time to look around – there are thousands of businesses that are totally employment run whereby the owners can take a back-seat. It does work and it will make your business more valuable to potential buyers when you get to the final closing stages of your business.

By having a managed-run business you open the market up to a whole set of other potential buyers – investors that want to buy a business, but not to get their hands dirty as it were.

Expanding and growing your business – Assuming that you have the management of your business sorted out and you have begun to delegate work to employees then you can concentrate more of your resources on expanding the business. Focus on your existing customers so that you can get a reputation for great customer service and ensure that your customer spend is high and they return to you and not to your competition!

Spend time on looking at ways to get your existing customers to keep buying and ways to grow your business and increase profit! You should also develop key performance indicators for your business which are those indicators that show how your business is performing and allow you to monitor those indicators that make a difference.

Selling your business – the final stage in any business is when you decide to sell up and move on. In all the stages leading up to this final stage will make a difference to how easy it is to sell your business. A well run, profitable, employee managed business will attract a higher profit-multiple for your business when you sell it – a business that has its finger on the pulse as it were will be much more attractive to buyers than one where the information is difficult to extract.

So if you have this final stage in your sights as part of your business plan out the out-set then you will make sure of a quick and easy sale whereby you get much more money for your business than you would ordinarily have.

Turn-on your television or pick up a newspaper and all that is reported right now, apart from the present swine flu problem, is the “credit crunch” – falling house prices, rising unemployment, businesses going bust, repossessions, bankruptcies and more…

So what should small businesses do?

Well this depends on whether you see this as an opportunity or a threat. There are no doubt certain businesses that will find these times more difficult than others, for example, only today there are reports about how the number of unemployed lorry drivers has gone up almost 5-fold since this time last year.

Where businesses are selling less and therefore resulting in a less of a need for transport, then transport companies will see a dip in demand and as a consequence might need to make redundancies. So I accept that times are tough and even more so for some – take solicitors and estate agents – with the dramatic fall in house sales their business income relating directly to house-sales will have fallen off a cliff over the last 12-18 months. However, take an estate agency – if they don’t already do so, the estate agent should consider moving into property rentals, as people are resorting to renting their property instead of selling.

By looking at the present economic situation as an opportunity and to start looking at ways to make efficiencies within any business you should be able to survive and along the way make more small business profits – doing nothing is not an option and will result in a business failure. You can ask your staff to take a pay cut so that they help in the survival of the business and you can then start to look at other ways in which the company can make profits from existing customers, by looking at other product lines that compliment your existing ones.

I suggest that you look at putting together a meeting with all your staff with the main or sole purpose of getting ideas from them on how to move the business forward. Before the meeting make it clear to all staff what the purpose of the meeting is and that it is to be a constructive review of the business and its activities.

The benefit of doing this with staff is that they all know the business and when you get a group of people together you end up with an “Idea Snowball Effect” in other words – one person might suggest one thing, which in itself might be a good idea, but if not it might lead someone else on to an even better idea – and so on…

You might even want to offer incentives to staff for the best ideas and for those that start producing results or alternatively, place a marker in the sand of where profits are now and then offer a group bonus based upon any profit increase whereby things improve.

Another way to move things forward is to ask your customers for ideas and feed-back. You can organise a “Client Forum” whereby you invite a number of clients in (I recommend 10-12 customers) and sit them in a room and ask them for feed-back on your products and/or services. It is amazing what can come out of this type of meeting, which can ultimately lead to providing a better service to your clients and they might even give you ideas for other products of service – thereby increasing your business profits!

Whilst improving profits – don’t forget to keep an eye on cash flows – it is all very well increasing your business profits, if you don’t get the money from your customers and keep cash in the bank.

The net profit in a business tells an investor or business owner how much money the company makes for every £1 it generates in sales revenue – the higher the profit the better the business.

The net profit margin is calculated by dividing total net profit by total sales revenue, for example:

XYZ Company Profit and Loss Statement for the period ended 30 April 2009
	£	£
Total sales		340,000
Cost of sales
Opening stock	11,000
Purchases	120,000
Closing stock	(13,500)
	________
Cost of sales		117,500
		________
Gross profit		222,500
Overheads*		150,000
		________
Net profit		72,500
		======
Net profit margin		21.3%

In the above example XYZ Company has a total net profit of £72,500 and total sales revenue of £340,000 and using the formula for calculating net profit margin, this gives a net profit margin of 21.3%, calculated as follows:

Net profit
——— (Divided by) —- x 100
Sales revenue

Or in figures:

£72,500
———- (Divided by) —– X 100
£340,000

The above formula gives the net profit margin for XYZ Company as 21.3%

Net profit margins for businesses vary by industry and depending on how a business is run within each industry will produce differing net profit margins. The more efficient the business then the more likely the net profit will be higher in comparison to the sales revenue it generates.

There are a number of ways in which to improve profit margins in a business one of which is to use “Profit Increase Software“, which looks at the ways to grow a business and improve profits.

Of course there are two benefits from having higher profits, which are increased money in the pockets of the business owners and a more valuable business, should you decide to sell.

10 ways to save money in your business and make your business a lean mean fighting machine!

In an economic slow-down it is time to cut costs!

When things are going well and saving money is not at the top of the agenda we can all let things slip and not pay close attention to cut costs. With the credit crunch still biting the majority of businesses still I though it would be good to help focus on where money can be saved.

1. Bank charges

If you have been with your bank for a number of years and many people tend to be very loyal to their banks, for some reason. Always remember this, if times get tough, the bank will be the first one to kick you out on the street, as their decision is based purely on a commercial basis without emotion. So it is always good to have a look at the competition and see what deals you can do with other banks and the bank charges you pay or save.

2. Bank loans

You might well have banking finance in the company be it a general loan or overdraft or it might be in the form of a mortgage on a business property. It is always worth while checking to see if you can get a better rate, especially right now with bank base rates being so low. The rate your are already on might not take account of the full rates reduction, so by moving lender you might get a better deal or even a very good fixed-rate deal.

3. Company credit cards

If your business uses credit cards then these will have an associated cost, be it an annual fee or the fee they charged if you use it abroad on business. Check with other banks how much they charge for a similar service, as you might be able to save some money where the cards are used in a significant way.

4. Pay-down your mortgage

Where interest rates have dropped so much your mortgage payments will have dropped by a large percentage. However, if you can afford it, why not keep your mortgage payments at the level they were before so that the capital element of the mortgage gets paid down faster.

In the long-run this will significantly shorten the length of your mortgage and reduce the amount of interest you pay over its term. Also, at a point when rates start to rise again, the amount you owe will be that much lower so the repayments at that point will be lower.

5. Review your supply chain

You might have ordered your stationery from a certain supplier for some time now and it might be that there are other companies out there that offer a better deal. There will be companies eager to get your business and might be willing to give you good account discounts to get your business.

Equally, your existing supplier might well give you a better discount if you ask them and more likely if they know they might loose your account. This saving tip applies to all of your supplies and where you are a manufacturing type business and you purchase goods to sell, then if you can source cheaper suppliers for your business, you will improve your gross profit margins.

6. Cash takings

If you are a cash business you might already try to minimise the amount of the cash you bank and instead use it to pay suppliers, employees and so on. Banks charge you significantly to bank cash so if you can limit how much you pay in this will reduce these costs. You might also want to look at other ways of banking your cash, for example the UK’s Post Office has always been a cheaper solution for banking cash, so it might pay to look around for banks that charge lower “Cash-Banking” rates.

7. Save money on your fuel bills

Even during this economic slow-down the cost of energy has remained relatively high so it would pay you to search around for a better deal. You can normally search online for Energy Comparison Sites so that you can cut your fuel bill on gas and electric. Sometimes by combining the two into one bill and by paying by direct debit will save money – so take time to speak to different companies.

8. Cut your phone bills

For some businesses the phone bill is one of the high costs and by switching supplier can reduce this cost. Look at getting a deal whereby the landlines you use are linked in some way to your company mobile phones so that calls between the office and the mobiles can be free with certain deals on the market. Consider incentivising your employees to switch to your own service provider where call-charges are cheaper when made between the same supplier and the business makes a significant number of calls to employee mobiles.

9. Accountants fees

Accounting and professional fees can be a significant cost to the business and it is always worthwhile reviewing not only the cost of this service, but also whether the accountant you use is saving you money. If you have a good accountant and tax adviser, they should be able to come up with tax-saving tips for your business and if you change the new person might see something that your old accountant has missed.

Also, try looking for an accountant that this prepared to offer a fixed fee – you end up paying too much to accountants or solicitors that charge by the hour, as you are paying for their inefficiencies if you pay them by the hour!

10. Company car policy

Review your company car policy and how often you change your vehicles and for what level of car you buy as a replacement. Also, consider the fuel type your company vehicles use – there are obviously petrol versus diesel and now you have the new types including electric cars and a combination fuel type car.

These are just 10 ways to save money in your business, but if you start to think this way then I am sure that you might well come up with your own ideas to help reduce costs in these difficult times.