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Cash Flow

Spring-clean Your Business and Bear the Fruits of Increased Efficiencies

As the year draws to a close – the time may come when you should look at cleaning out those old files and do a recon.

Standard Bank




Spring in South Africa comes at a time when the festive season is around the corner and consumers are beginning to think about holidays.

For the small business owner, who also happens to be the financial manager and fulfil a number of other jobs in his business, spring is the time to get down to basics and prepare the business for the busy time ahead.

It is easy when getting involved with the many things that have to be done in a business to lose focus, says Ethel Nyembe, Head of Small Enterprise at Standard Bank. However, it pays once in a while to stop, check on the business and plan your way forward.

“The process of spring-cleaning a business is something that should be done at least once a year. It is a time to examine all aspects of the business- including finances- and to get things right for the rest of the trading year.”

“The place to begin is by examining your shelves and store rooms and reviewing your stock. This activity will lead you on to naturally examine the financial aspects of your business.”

Related: There’s No Better Time than Now to Start Innovating

Ideally, at least five activities should form part of a business spring-clean, says Nyembe. These are:

1. Checking and reviewing stock on hand

Stock lying on a shelf or in a storeroom is money that is being non-productive. Assess what sells well and increase the shelf space allocated to these items.

Take stock that has been accumulating dust, reduce prices (but still keep a healthy profit margin built-in) and have a sale. There is no better time to have a sale then during a new season.

Use the money you make to buy stock that sells quicker. You can also plan ahead and keep the focus year-round, by creating a sales sheet which helps you identify quickly what is selling and what is not and replenish stock accordingly.

2. Streamlining your purchasing

Adopting a ‘just in time’ approach to ordering stock means that you get in stock just in time to sell it. You then don’t have vast amounts of stock piled up waiting to be sold.

This means that precious capital is preserved, cash flow is maximised and money can be retained for buying items that sell easily.

3. Examining your payment systems

You can accelerate the cash flow in your business by making sure that you have all the options required to help your customers pay.

It costs money to accept cash, drive to a bank and manually pay it in to an account. The more point of sale options available for payments at your business, the better your service and collection of payments.

Related: How to Put your Small Business in the Best Position to Get Credit from a Bank

4. Spring-clean your financials

Things to consider when spring-cleaning your cash flow and financial management are:

  • Checking your accounts. Where customers have accounts and have histories of being late payers, decide whether what they cost you in terms of delayed payment is worth it. Take steps to collect outstanding money and close accounts that haven’t been used for some time. Get bad payers off your books.
  • Change payment terms and offer good customers discounts for early settlement of invoices. In these tough financial times, people and businesses are all trying to save money. Discounts help them and help you by boosting your collections, increase the health of your balance sheet and keep cash flow positive.
  • Approach your suppliers for extended payment terms – for example: Ask for 60 days instead of 30 days. This can help stabilise your cash flow. If they insist on a 30-day cycle, ask for a discount for early payment.
  • Look at the cycles your business goes through. If you have quiet periods during the year, consider applying for an overdraft that you can use to smooth out the trading bumps. It means that you don’t have sleepless nights and you can meet your financial obligations.
  • Relook your operational costs. Examine everything from rentals, systems, phone, electricity and transport costs. Make cuts where you can, as these savings go straight to your bottom line.

5. Examine the costs of replacing and upgrading equipment and consider new finance models

Review your equipment needs and assess the service life you can still expect from these investments. You may find that some equipment is old and requires maintenance frequently or simply use too much power.

When equipment is too expensive to maintain and new and more efficient machines are needed, consider your options. You can:

  • Purchase new equipment or vehicles outright.
  • Buy through an instalment lease instead of having a major cash outflow from the business, this will allow you to regulate the time and costs of replacing new equipment.
  • Opt for a lease instead. Although this may be slightly more expensive on a monthly basis, there are major advantages. Most office and other equipment include a maintenance agreement, so all service costs are covered in the lease. Maintenance therefore takes place regularly and equipment remains reliable. The contract can include an option to upgrade to more sophisticated machinery at certain times during the lease. This reduces operational costs and ensures you always have state-of-the-art equipment in your business. At the end of a lease, equipment is returned to the lessor, so you have no concerns about disposing of old equipment.

The above five activities form the core of activities designed to sharpen the focus of a business, however it is worth spending time examining everything about your business.

Pausing to check what your competitors are doing, how they are marketing their businesses, their products and pricing structures can also reap major benefits.

“A good spring-clean also allows you to get reacquainted with your business – something essential to small business owners who get caught up in everyday tasks and are unable to spend enough effort on developing strategies and plotting the way forward for their companies,” explains Nyembe.


Standard Bank SA is the largest operating entity of Standard Bank Group, Africa’s largest bank by assets. Standard Bank SA provides the full spectrum of financial services, with more than 720 branches and over 7 100 ATMs. Independent surveys of customer satisfaction consistently place Standard Bank at or near the top of their rankings. The personal and business banking unit offers banking and other financial services to individuals and small-to-medium enterprises. For further information, go to


Cash Flow

The Simple Way To Pay Wages When Your Staff Don’t Have Bank Accounts

If you have employed casual workers over the busy season, you can pay wages even if they do not have bank accounts.






At Absa Business Banking, the things that are important to you are just as important to us. We understand your business needs, which is why we have developed tailored solutions to help you where it counts. Take CashSend Plus, for example. It is a payment solution that enables you to pay workers even if they do not have bank accounts.

Related: Hiring Your First Employee? 5 Things You Need To Know

It is safe and secure

Your employee will receive a six-digit access code and a ten-digit reference number, so that they can verify the transaction. The money is instantly available at an Absa ATM.

You can even pay yourself

We have all lost bank cards or wallets at some point in our lives. What an inconvenience. Well, it is good to know then that you can access cash by sending it to yourself. Now, that is what we call better. 

Related: How Salary Transparency Empowers Employees – And When Not To Use It


Please speak to one of our consultants or call 0860 111 123 or visit your nearest branch.

Absa Business Banking 

Do better business. Prosper.

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Cash Flow

Entrepreneurial Balancing Acts with Debt

Young South African entrepreneurs face many challenges when it comes to debt-related financing. Small and medium enterprise (SME) owners typically require extensive debt financing from bank and non-bank lenders.

Harald Merckel




Young South African entrepreneurs face many challenges when it comes to debt-related financing. Small and medium enterprise (SME) owners typically require extensive debt financing from bank and non-bank lenders. Unfortunately, many South African entrepreneurs are limited in their ability to access capital markets. Among others, the major challenges facing entrepreneurs include lack of credit history, no collateral, shaky credentials, and unformulated business plans.

Regardless, SA entrepreneurs are forging ahead and using multiple resources at their disposal such as payday loan providers, non-bank lenders, family and friends, crowdfunding and other economic empowerment initiatives to raise the necessary seed capital for investment purposes. Given the staggering unemployment rate in the country (+25%), the only way out for many people appears to be entrepreneurship. The 2008 global financial crisis threw the economy for a loop, and now the hopes and dreams of many South Africans hang in the balance.

Related: Every Tough Choice Has Management Debt – Are You Accounting For Yours?

ISM Study Sheds Light on SA Entrepreneurial Pros and Cons

An intensive study conducted by the University of Cape Town’s Unilever Institute of Strategic Marketing (ISM) found that the country is experiencing ‘a crisis of aspiration’. Simply put, many South Africans are struggling to attain their career objectives in an economy that has been ravaged by corruption, mismanagement, and scandal. Despite tough economic times, South African entrepreneurs are determined to try their luck. Pressing challenges in the form of rising unemployment, and an economy mired in failure are challenging entrepreneurs to be more inventive than ever before. The most volatile component of the economic spectrum in South Africa is the middle class.

Many South African families have lived the high life, or ascended the rungs and then been knocked down a peg. This instability is creating added volatility in a country where high crime, mismanagement and political rancour pepper the scene. For many entrepreneurs, any access to credit is a godsend. Banks and non-bank providers offering personal loans, business loans, or credit card funds invariably expose themselves to debt default. For entrepreneurs, it’s important to know where to draw the line. Access to lines of credit in a crippled economy is significantly more valuable than the equivalent access in a developed economy.

How to Know when you are Overstretched as an Entrepreneur

Debt is considered a prerequisite for investment purposes. Most South Africans simply don’t have the necessary capital to start up a high-tech venture, fund a new business, or conduct marketing and advertising activity. As such, lines of credit are increasingly being used to propel business activity among SMEs – both in the formal and the informal sector. However, once debt reaches untenable levels, the tough questions need to be asked. For example, if multiple loans and multiple payments are required monthly, revenue streams need to be evaluated against expenses to gauge whether this is a feasible status quo.

Related: How To Handle Your Post-Holiday Debt

Many entrepreneurs find it difficult to manage multiple loans simultaneously, although it is necessary to acquire the capital from multiple sources. One of the ways to deal with these types of exigencies is a single loan from a low-cost lender in the form of debt consolidation loans. Simply put, these loans are provided by bank or non-bank lenders at lower interest rates than the prevailing interest rate on other lines of credit. By taking out a debt consolidation loan, the entrepreneur has more disposable income over time by not paying the higher interest on credit card debt.

Escape Debt Before Debt Consumes You

There are several other ways to know when your personal financial situation has reached critical mass. For starters, the nature of your business may require you to continue dipping into lines of credit to maintain business operations. If you don’t have the requisite discipline to stop indebting yourself, you may not be able to get out of debt. Debt consolidation is only effective insofar as you have the necessary discipline to put an end to debt financing of all business-related activity.

Credit should be used sparingly, and profits should be generated to allow your business to prosper. In a tight economic climate, costs are the bugbear that need to be attacked. Lavish trappings are unnecessary for business functionality – modest budgets, and high-quality goods and services are far more effective than window dressing at a premium.

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Cash Flow

How South Africa’s Small Businesses Plan To Invest Their Money In 2018

Here are their five areas they should focus their attention on in the next year and beyond.




Despite economic uncertainty, South Africa’s small businesses are positive about the future. In fact, our State of South African Small Business report reveals that 40% of small businesses are expecting to grow. However, to achieve growth without overextending their limited resources, small businesses need to invest wisely.

Here are their five areas they should focus their attention on in the next year and beyond.


When times are tight, companies typically reduce their marketing spend. This isn’t the case for 36% of South Africa’s small businesses. These respondents recognise marketing as a critical investment area.

They’d rather make a concerted effort to grow their customer base, than sit still and do nothing as consumer demand declines.

Related: What To Consider When Investing Your (Hard-Earned) Money


Without access to the latest technology, business growth can quickly stagnate. This is why 23% of South Africa’s small businesses plan to invest in up to date equipment, whether that be new machinery, mobile devices or computers.

The right investment in this area can give a business a real competitive advantage.

It can help boost profits and improve operational efficiency – both of which can help a small business withstand difficult economic conditions with greater success.

Product development

Consumers are spoiled for choice. Their needs are constantly changing and companies can’t afford to become complacent. To keep up with market demands, 22% of small businesses plan to invest in product development. Barring a few timeless classics, most products need a regular review and tweak to stay relevant and popular.



Digitisation is transforming business functions across the board. Technologies, like cloud software can take care of laborious administrative work.

Related: How To Make Money Investing, According To Ashton Kutcher

This liberates employees from time-consuming tasks, enabling them to focus on more strategic work like customer retention and acquisition.

Technology has the power to improve productivity and efficiency. Which is why 18% of small businesses are going to focus their investment plans on this area of their businesses.

Customer service

The customer should always be the priority. It doesn’t matter how good a product is, if there are no customers, then there’s no business. As competition increases, the user experience becomes more and more important to win over customers.

Business growth depends on happy customers and to achieve that, 18% of small businesses plan to invest in delivering better service.

All five of the above business areas are worthy investment focuses. The question is, how does a small business work out what to invest where? The only way it can invest effectively is with a full view of its company finances. A small business needs to be able to see which functions have provided the best return on investment to date.

Related: 12 Millionaire Habits To Start Making Serious Money Soon And Build Wealth In A Hurry

It also needs to consider how much investment capital it has to spend. What’s more, before it makes an investment in say, marketing or product development, it must know exactly how and where the money needs to go.

The right software can help a small business access the real-time insights it needs to make better, faster financial decisions. To combat increased competition and market uncertainty, South Africa’s small business owners need access to up-to-the minute information from any device no matter where they are. An informed investment has the greatest chance of success.

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