On the afternoon of Day 1 at Small is Beautiful 2015, we were joined by Matt Perkins from Freeagent – one of our conference sponsors.

Freeagent is accounting software for small businesses and freelancers and Matt Perkins works on diverse projects in the business, from negotiating large commercial deals to educational workshops for small and microbusiness owners.

Matt came armed with tons of advice and statistics about a topic that often eludes microbusiness owners: accounting. "The usual reaction is snooze or scream," he said, "but today we'll aim to change that."

His talk began with a question: What percent of businesses do you think have no formal accounting procedure in place? For registered UK businesses, it's a whopping 63%.

Most businesses fail due to problems like:
Poor cash flow management
Inability to pay tax or wages
Overspending
Poor credit control, and
Insufficient funding.

The vast majority – a massive 90% – of small business failure is attributed to poor cashflow. Are you convinced that you need Matt's help yet?

Matt's take on this is that businesses should look to treat the causes, not these symptoms. He explained the basic business flow that makes cash king in businesses of all sizes. Size doesn't matter: a business must pay for itself.

The basic business flow is simple: Cash in -- Cash out -- what's left is profit. It really is that simple. To increase cash, you do more of your work, or you raise your prices. To decrease spending, you control your expenses.

Slow accounting is a huge problem for businesses because keeps us from knowing what's going on.

Matt shared 3 golden rules for cash flow:

It's not a sale until they've paid.
Get paid as quickly as possible.
Keep control of your costs!

Getting paid on time can be a huge hurdle for small businesses, so Matt shared some suggestions that help you ensure you get paid on time:

BACS
Chip & pin payments
Mobile payments
Payment buttons on invoices, and
Direct debit.

Want to know the importance of getting paid? He also illustrated that a £5000 payment, when delayed by 1 month, takes £200 worth of work to recoup (see the video below for more on this).

Another way to keep ensure you're getting the most out of your money is to keep all of your receipts. Nearly 40% of receipt expenses are for £0–10 transactions. So don't cast them aside – saving them makes a big difference!


Learn more about Matt Perkins here.

Like what you see? Small is Beautiful 2016 takes place in Edinburgh on 14 & 15 June 2016. Register here.