1. Prepare two treasury statements
“Treasury planning is the main financial management instrument you have. Forget about the operating account ... that's fine, but since you are going to have negative Ebitda, what else does the operating account give you? The point is not to die, and for that you have to avoid going into insolvency, and for this you have to control the inflows and outflows of the treasury ”, says Manzanera.
Isidro de Pablo, director of the Center for Business Initiatives (CIADE) of the Autonomous University of Madrid recommends that you prepare "two statements of treasury: one, until you start to sell, and another, until you start to collect and the business begins to feed back."
“Many entrepreneurs don't take startup deadlines into account when doing their financial planning. Everyone expects to be billing the first month and they do not take into account the collection periods of the clients. A customer who pays you in 30 days is already a bargain today, "he says. Dionisio Txaparro, commercial director of Oinarri SGR.
"One of the problems of entrepreneurs is that they apply a large part of the resources they have in the start-up of the project and when they are asphyxiated in the treasury they cannot put the money to market the project, with which they strangle themselves", qualifies De Pablo.
“Thus, the first state has to be weekly to avoid unforeseen events. Think of a software company, which has to invest and invest until it has a beta version and in the meantime it has to make disbursements of a different nature. Or imagine a commercial establishment in which you have to deal with rents, licenses, renovation works, installations, supplies of merchandise ”, he says.
Borja Recolons, founder of the online store Mequedouno.com, agrees with De Pablo and points out that “from the beginning we do an exhaustive weekly report on the state of the box. It is one of the parameters that you have to follow closely to see if you invest more in stock, in pending accounts… from there, seek a balance with your suppliers ”.
“Then there would be the start-up phase. There we must distinguish, again, two other stages: the one that is associated with the maturation period of the product - from when you invest in producing it until you charge to sell it - and the phase in which you have already begun to charge and your company has income ”, adds De Pablo.
Kepa Apraiz, CEO of Kategora, a Bilbao real estate consultancy with offices in the United Kingdom, Hungary and Poland, a business that handles more than 600 monthly invoices, explains that: “We do monthly cash reports. One week after the end of the month, the financial manager of each of our delegations enters in an Excel the reality of the company: the initial balance and the final balance of all the accounts, and all the expenses that have been, and Then we check it at the headquarters. We are very demanding with the timing. It is not worth saying that we are full of work ”, he adds.
2. Analyze your costs per project
“To do good treasury management it is necessary to spend time doing a good cost analysis. This is important, above all, in knowledge-intensive sectors: professional services, consultancy, software… in which a diagnosis has to be made, in which a proposal has to be made to the client, and that take several days of work. You need to know how much that project costs you to be able to pass it on to the final price later, ”says De Pablo.
“We find deviations in service companies that have run out of cash after six months because where they expected to earn 100 they have lost 50. Why? Because they have deviated in the hours of the projects. If you leave in hours, basically, it is as if you left in materials, and it has a cost ”, explains Txaparro.
3. Increase your financial needs by 15%
“When you calculate your financial needs it is advisable to increase them by 15% for contingencies. If you have more experience you can reduce this percentage to 10%, but not less. If you have doubts and are not sure how to focus it, it is recommended that you increase it up to 20%. This allows you to have a mattress if things go wrong. And if they go well you have a margin of more treasury. And the way to materialize it is, again, in a treasury forecast. A desirable cash balance should be around 10% and 15% of unforeseen expenses, ”he suggests.
4. Invest in R&D short
“When you make an investment in R&D, the result of that investment has to be on the market in a certain time and you cannot extend it any longer. Because as you extend it, you are going to enter into extra costs that later will cost you a lot to amortize. The interesting thing is to limit the investment: by that date I have to have this product on the market and with these R&D costs to be able to get it at this price and be able to obtain this profitability. And you have to plan that before starting ”, says Txaparro.
“Bear in mind that investments in R&D must be amortized in five years, after five years they penalize the income statement. And it is not the same to sell for 10 something that has cost you to develop 80, than to sell for 10 something that has cost you 200, "he warns.
5. Charge your customers sooner
What are alternatives to third-party financing? The first is your customers. “We always demand payment in cash or, at least, that the payment covers the cost of the materials. If we give a budget, we ask for, at least, a 60%-65% because we know that this way we minimize cash risks ”, says Apraiz.
Andrea Uribarri, Director of the Vitalaging Medical Center, points out that “due to the high amounts of some of our services, we provide the client with the possibility of making payments in three different ways. One option is up front and in cash with an additional 2% off. Another, twice, at the beginning and in the middle of the treatment. And finally, financed in three and six months ”.
6. Postpone payment to suppliers
Borja Recolons points out that “if you have stable relationships with your suppliers, you have to negotiate with them and seek a benefit for both parties. And if there is no agreement, it is better not to work. If, for example, they want to charge in cash, but they don't give you discounts, you are simply not interested in working with them ”.
“From the outset, all providers allow us to pay 30 days from the invoice date. The most important ones allow us to establish the deadlines ourselves (30, 45, 60 and up to 75 days from the invoice date) according to our needs. In these cases we calculate in how long we are going to recover the investment of the products to be able to establish the payment conditions ”, says Uribarri.
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Rafael Galán
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