Protecting your employees from possible dangers at work is the law and the most effective way of doing so is by performing a risk assessment.
DON’T LET THE RISKS GO UNNOTICED
It is very easy for potential health risks to go unnoticed in day to-day working life, carrying out your job role. A work risk assessment highlights clear-cut measures that can effectively control risks within the workplace. The assessment does so by examining where and what in your business could cause harm,helping you weigh up whether or not you have taken sufficient safety precautions.
Carrying out a work risk assessment not only protects your work force but also the welfare of your business. Accidents at work can ruin lives, result in less work output, damage machinery and increase insurance costs. By implementing a plan to control the risks means that you are adhering to the law and protecting your workforce as well as your business.
IDENTIFY THE HAZARDS
Recognising the hazards is the ideal place to start when assessing the risks in your workplace. If you are a small company then you are more than likely able to identify the hazards and carryout the risk assessment yourself. If your company consists of many people with varying job roles then it is recommended that a health and safety expert is called on. If you work in a large company then it is advised that you involve your staff or their representatives to ensure your work risk assessment is carried effectively. Recognizing the hazards doesn’t need to be a complicated process and the obvious risks will be easy to identify and prevention methods simple to implement. Start by taking a walk around the workplace identifying possible hazards. Ask your employees or representatives for their perspective. Consult manufacturers instructions and accident records to help discover less obvious hazards.
Once potential hazards are identified, matching them to their relevant job role is key. This will identify the most efficient way to mange the risks. After evaluating the risks in the workplace, the precautions should be finalised with the law stating the need to do everything reasonably practicable to protect your workforce from harm. It is advised that you carry out research on risk control good practice and compare this to the precaution solution that you have drawn up. This should bring you up to speed with current standards and help to implement your plan of action. Remember that the precautions put in place do not need to be expensive. A small cost implementing your plan could save your business a lot of money in long term insurance costs.
RECORD YOUR FINDINGS
It is recommended that you record your work risk assessment findings for future reference share these with your employees. These will help with future updates and comparisons. Reviewing your work risk assessment should take place when updates to procedures or machinery occur within the company. This will keep your control plans up to date and minimize the risk of accidents and injuries in the workplace.
What 80% of Businesses Don’t Know: Tips for Improving Your Working Capital Management
What is the number one way to prevent failure in business? Take a minute to really to think about your answer. What comes to mind? Increasing patients or customers served? … Effective marketing? … Location, location, location? … Improving patient or customer care? … Being the best in your industry?
Although these are all essential aspects of business, the answer isn’t any of the above. The number one way to prevent business failure is to properly manage your working capital.
To ensure that we’re all on the same page, working capital is simply defined as the difference between your current assets and current liabilities. If this figure is positive, you have working capital available. This working capital may exist as inventory, accounts receivable, or cash on hand.
Working capital management is critical management issue for growing businesses or medical practices. Take the example of a growing doctor’s office: As expenses rise with patient-load increases, you accrue more outstanding cash, particularly before receiving reimbursement from the health insurance payors. At this point, your incoming cash does not nearly offset your costs going out. This may be manageable while you work with payments for past services; however, eventually the time lag may become a significant stress-point for your business.
By adopting a few working capital management strategies, you can make your assets work for you, without becoming beholden to banks.
Strategy #1: Get Paid Now
Let’s take a look at the most obvious area: accounts receivable. What do your receivables do for you when they are not being paid? While your profit margins may look stellar if you have a lot of orders, you have essentially loaned all of your clients the amounts of your invoices-until they decide to pay you. Doctors, in particular, know the pain of this situation. Insurance payors are particularly adept at prolonging the time for payment; they realize that the longer they take to pay, the greater their profit margins.
Is this just another cost of doing business? Well, not necessarily. Eighty percent of small business owners, medical practitioners, and small hospitals are completely unaware of a resource Fortune 500 companies have used for decades: accounts receivable funding.
Banks often measure accounts receivable at as low as 50 percent of their overall value as collateral for a traditional loan. In accounts receivable funding, however, accounts receivable are calculated at full value. Plus, you accrue no debt for this financing, as you essentially sell your accounts receivable for payment against the full value.
Perhaps the idea of selling your revenue stream makes you nervous. But consider this: You usually receive 80 percent of the entire amount of the invoice within one or two days-at least 28 to 118 days sooner than usual. This cash injection allows you to make capital improvements for your business to generate more revenue, leverage the cash for discounts on your inventory, cover operating costs, or provide bonuses to your employees, for instance.
As your invoices are paid, your funder will repay the other 20 percent, minus the negotiated fee (average four to five percent of the invoiced amount). Don’t get hung up on the ‘cost’ of the funding. With proper management of those funds, you will more than make up for fees by the investments made in your business. Your day-to-day business costs may stay the same, but the tremendous increase in incoming cash will enable you to rest easy.
Homework: Review your accounts receivable aging report. Note the average payment time from one of your best clients or insurance payors. Assuming payment of 80 percent of the invoice value in 48 hours, make a list of ways to use that money for your business:
After you total the increased income generated by implementing this strategy, you can easily see the real benefit.
Strategy #2: Shorten Your Operating Cycle
Your operating cycle starts when you take cash out of your account to begin work for a client, and ends the day the client pays you. If you complete a project on Tuesday, for instance, but do not invoice until the following Friday-or even the end of the month-you lose days of income. Since you need the cash in your account-not just in your profit margins-you must minimize the time between service rendered and service invoiced.
Homework: Review how long you usually take to invoice a client. If that period of time exceeds a week, have your staff shorten that time. This adjustment will decrease the payment time by as much as 25 percent.
Strategy #3: Collect Past Due Accounts
Do you have a significant number of invoices out more than 60 days? If so, is your staff doing anything to shorten this timeframe? Call the clients whose invoices have been out 30 days and inquire about the invoice. Devoting a few hours a week to completing this task is money well spent if it ensures that even half of your outstanding invoices are paid a couple of weeks earlier.
Some delays in the healthcare industry, for example, are intentional. Prolonging the turnaround for payment controls costs. In these cases, you don’t have any recourse. As any doctor can tell you, calling the insurance company to inquire about a claim can be a fruitless task.
Homework: Review your collections procedures and tighten up your ship, if needed. Assign one person to follow up on invoices outstanding for more than 30 days. Realize, though, that collections results fluctuate with your clients’ priorities. Don’t count on this as your only means of improving your cash flow.
Strategy #4: Turn Existing Equipment Into Cash
As we know, keeping current with technology improvements are constant and necessary to remain competitive. Leasing is a way to stay up-to-date without incurring the charges of frequently buying new equipment.
But have you ever considered leasing equipment that you already own? One option is selling your equipment to a leasing company, and leasing it back from them. This way, you generate some cash for your business. You will, of course, incur the lease payments.
Homework: Take stock of what you own. If you need capital, contact a few leasing companies and gauge their interest in purchasing equipment for you to lease back. Alternatively, a Certified Cash Flow Consultant will shop for you. Since they are independent consultants paid by the leasing companies, you will avoid any additional charges.
Strategy #5: When In Doubt, Outsource
Outsourcing certain support areas of your business, in which you are not an expert, is an excellent way to reduce payroll and insurance costs. You will spend a higher dollar per hour for importing experts, but the reduced costs (no health or workers’ compensation insurance) usually compensate for the cost variance.
Be sure to hire these experts with as much diligence as you would any in-house employee. As you’ll typically retain this type of assistance through specialty staffing houses, interview the individuals to be assigned. As integral members of your team, they must be as reliable as any employee on your payroll.
Homework: Contact area firms that provide the kind of staffing you need. Compare the cost of those contracts against the cost of keeping these staff on payroll. Be careful: Consultants can get expensive, so be sure to build cost controls (i.e., fixed fee for a weekly basis or hourly with a ‘not to exceed’ clause) into your contract. Be clear on their scope of work, to whom they report, and how you define satisfactory performance. In addition, you must directly approve any staff changes.
Strategy #6: Inventory When You Need It
Inventory that sits in the warehouse, not being sold for income, eats away at your available cash flow. It is an asset, sure, but it should not become a liability because it is not quickly converted to cash. Over-ordering of inventory gets many businesses into trouble.
Review your inventory forecast all the time, and be aggressive. Know your options in times when you have shortfalls. Fulfilling customer orders on time is a number one priority, so don’t take unnecessary risks. If you simply hoard inventory to offset any chance of being caught off-guard, you lose the potential profits made by managing it more aggressively.
Homework: Review your current and projected inventory for the coming months. Do you need to make changes, or is it all under control? Make any necessary calls to your suppliers to negotiate better terms or better understand their supply controls.
Make Your Working Capital Work for You
Working capital management is a key element to business success and the number one way to prevent business failure. By implementing strategies such as accounts receivable funding, outsourcing, or inventory management, your business can optimize the return on assets it already possesses. Your company will then be well positioned to handle future growth or economic downturns.
