Dernière modification le 01/07/2022 à 15:28 par Kate Griss

INTANGIBLE CAPITAL VALUE

by Erwan COATNOAN DE KERDU

Your copilot in creating a successful company

Managing your startup: the essential financial KPIs 

  by Erwan Coatnoan de Kerdu

KPIs or “Key Performance Indicators” are very often cited as key performance indicators for companies. However, it is not always easy to determine which ones are the most important to manage a company.

KPIs or “Key Performance Indicators” are very often cited as key performance indicators for companies. However, it is not always easy to determine which ones are the most important to manage a company.

Treasury

To manage a startup, you need to know at least the turnover and the cash flow. But there are other elements to consider.

Identifying the working capital requirement is necessary to manage the company. Thanks to this data, it is possible to determine the turnover that it is necessary to achieve to reach its break-even point. It takes into account salaries, rents and expenses.

Then, the founder of the startup must also keep his business plan and accounting up to date. This allows to determine the future projects and readjust them according to the real results of the company. Ideally, the numbers should also be translated visually, using graphs, to determine the growth rate as well as the troughs in activity.

Innovation

Startups working in innovation have to spend a lot of money on research and development. In theory, these expenses are reimbursed by the State, but it is not always easy to recover them, as the amounts involved can be significant. If they are misunderstood, subsidies and repayable advances constitute risks for the startup. It is necessary to set up a follow-up of the engaged expenses and to preserve the justifications of those with the financial organization which delivers them.

Beware of payment delays

Knowing how to manage payment deadlines is essential for every company, especially for start-ups. It is necessary to collect the receivables from customers as quickly as possible, while paying suppliers as quickly as possible. Therefore, payers must be encouraged to pay quickly, for example by offering discounts. In addition, it is also possible to encourage them to advance part of the amount due as soon as possible.

When dealing with suppliers, care should be taken to communicate about payments. Asking for a receipted invoice when making a payment helps to avoid conflicts and bad relations. In case of payment difficulties, you should not hesitate to talk to your suppliers in order to set up a payment plan and avoid conflicts.

Get into the habit of reminding your customers regularly, especially if some of them are slow to pay you. Maintain a relationship of trust with large groups.

Knowing how to anticipate cash flow problems

Managing your relationship with your banker is a strategy that should be put in place quickly to anticipate any cash flow problems. The bank must consider you as a partner. You must therefore be transparent and honest with them. In the same way, to optimize cash management, it is possible to invest unused money. A close relationship with your bank allows you to benefit from authorised overdrafts in the most difficult times.

Companies often make the mistake of creating debt when finances are bad. However, it is better to create debt during a period of growth. The idea here is to anticipate and negotiate when the company is in good shape. And to save money, there is nothing like stopping unnecessary expenses. Waste of electricity, paper… All savings are good to take. Accumulating small, unnecessary expenses often leads to a company’s budget being out of balance. Of course, you have to be smart about it. Investing thousands of euros in new equipment to save a few dozen euros may not be the best solution.

 

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