Managing your Finances after Business Grants

By Ursula McLean

Your company has succeeded in getting the business grant in the UK that you were looking for. You got through all the applications and presentations, collected the matching funds and you are on the way to dev eloping the business or research which ever your grant is for. Now you need to keep track of your spending because the grantor is going to want to see where their money is being spent.

Simple Balance Sheet

You can keep a simple balance sheet with incoming and outgoing expenses and detailed descriptions of the expenses. Save all receipts to prove out the balance sheets should you be audited? There is a possibility of this if the grantor of your business grant wants to make sure money is being spent how it should be spent.

Manage your Cash Flow

You need a positive cash flow to prosper in your venture, pay the employees and to make the investors happy. You know the basics of positive and negative cash flow so now is the time to look ahead and give a forecast of the future earnings of the company. This is something you may not do until after the first year of business, when you have something to go by. Be realistic in your forecasting; if you are not, it can cost you your business.

What to List for the Forecast

Your business grant provider will want to see your forecast with your incoming and outgoing expenses, including the times there is a negative balance. It does happen but can be rectified once the reason is found. There are excellent programs of accounting software that you can purchase to make this job a lot easier for yourself, just look on the internet, or see what your support network is using.

Remedying Negative Cash Flow

There are many things that can contribute to a negative cash flow and this could affect your business grant terms. Make sure you run credit checks on customers and see that you are paid on time. If you are not delivering the product on time, this is an efficiency matter that needs to be corrected immediately or you will be closing your doors in a short time. Accept orders every way you can: order forms, telephone or the Internet. Make sure the order forms are easy to understand and fill out. Try identifying probable cash flow trouble and head it off before it affects business on a level you can’t recover from. Business grant websites have lots of information on how to identify problems before they become a problem for your business. Are you being overcharged for goods or services and haven’t caught the problem yet? Are your suppliers late in deliveries?.

Avoid over trading too; if you take on more than you can put out in a set number of days and still deliver the goods on time then you are overtrading. This is something that you need to avoid from the beginning and then it won't be a problem and create a cash flow problem. You need to match your production with the demand in a forecast that way you can see the cycles of production and know when you are unable to take on more orders. You will also see when you can take on extra production in the slower times.
Keep an eye on the bottom line as well; your assets and liabilities need to be monitored to make sure that liabilities don't become larger than the assets. There is a lot to running a productive business and it is even tougher with business grants because you have to keep records that may be scrutinized at any time to make sure you are within your terms.

About the author:
John McLean is a Business Development Executive with Locate in Kent. Locate in Kent has helped more than 440 companies relocate to or expand in Kent. The company's free, confidential corporate relocation service includes information about business grants, property and commercial sites in Kent and Medway.

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