Top 5 Financial tips crucial to road transport

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As the Coronavirus crisis continues Donal Dempsey highlights five important areas of concern relating to the haulage industry.

  1. Has your business used the Government support that is in place, providing that it meets criteria for assistance? For once, the transport industry is rightly seen as a crucial industry and employment incentives for businesses that have experienced a decrease in turnover over 25% qualify. Make sure that your employment costs, with the use of the COVID-19 crisis entitlements are implemented in order to reduce operating costs.
  2. At this stage if your business turnover is reduced (and this is the vast majority of transport firms), make sure that you have contacted all your finance houses and banks to maximise cash availability of your business. Moieties on lease payments and holidays on principle and interest payment of mortgages are available and the Banks are now proudly stating that they will be the assistance in this crisis and support, as opposed to be part of the problem during the last recession.
  3. Strong credit control is vitally important. No point in scrapping by and offering a service if your customers cannot or will not pay you. Bank support is available to them also so they can pay. During periods of crisis it’s those that can pay are the ones that won’t, or will use every reason to seek out unfair discounts and part payments. During the 1980s recession customers were using friendships and loyalties with clients to drag payment or roll forward payment. At the end of the day it was both the small privately owned businesses and some major co-ops that has this tactic down to a tee. Strong credit control means that invoices and statements are produced on time. A quick response re proof of delivery and accurate allocation of receipts together with a strong communication to customers that credit terms are necessary for your survival. As a business owner blame the Accountant (they are normally used to that) and keep your finger on the pulse of debt collection and remember at the end of the day the best person to collect your money is you.
  4. This leads on to cash flow planning. At this stage you should be reviewing turnover weekly, adjusting measures as this effects cash flow and making sure that your projections are realistic and that you are not hit with unforeseen events. If you are using invoice discounting, as many hauliers do, watch that aged debt does not substantially reduce funds availability and also remember Invoice Discounting is ideal when turnover is increasing or steady but now when an immediate reduction in turnover is taking place, it will have a major effect on cash availability. This is why communication and forward planning with the finance houses re asset finance moieties is vital.
  5. To run the business properly you need to mind your health, it’s a stressful time and potentially your business is at risk but you need to keep your workers and staff on side, needing their support and they need to see that you are at the helm and able to charter the business in choppy waters. Keep up to date with trends in the industry, get support and use it, takes breaks even when you are most under pressure and remember businesses will be needed when this is all over and there will be opportunities ahead. Donal Dempsey.