7 Tips to Effectively Manage Your Fashion Business Finances

Desireé Duffy  |

As a fashion designer running your own business, you are living the life. Your design sense is impeccable, and you can barely keep up with orders. Everyone loves your style.

Yet, your business is floundering. The money isn’t coming in.

While the fashion industry has brilliant minds that flourish on creativity and spontaneity, many young designers lack critical administrative and financial skills. As a result, they struggle to realize their dream of developing a successful brand. Check out these seven financial tips for brand recognition and success.

The real payment plan

There are quite a few giant corporations that have extended payment terms up to four months. This means you need to be prepared to receive payments long after you’ve fulfilled an order. It is crucial to have a system that keeps track of payments and orders so that your predictions become profit instead of distant possibilities.

Optimize the paperwork process

Documentation can be a very cumbersome and tiring process. For proper invoicing, it is very important to receive payments on time. If a company wishes to refrain from payment, then they will look for any excuse to keep their funds. This includes scrutinizing orders and contracts for loopholes. The easy fix? Keep your papers in order.

One example to follow is Scott Cooper Miami. He specializes in various interests that include art, fashion, events, and local news. With so much going on, it’s easy to see why he emphasizes the importance of paperwork and transparent accounting for business success.

Think of it this way: A solid paper trail not only pleases your clients and improves communication, but it also protects you. And your business.

What would improving your paper trial look like? Let's look at fine-tuning your accounting. One simple step is to hire an expert.

You do not need to recruit a full-time accountant, but you need to get someone to manage the bank statements and invoices that are piling up! There are several types of accounting services that can assist you in staying on track.

Examine possible financial threats

Inconsistent pricing, inaccurate invoicing, poor customer contact, or poor choice of tools can contribute to a poor payment infrastructure. You need to hire the services of a specialist consultant to identify these issues and come up with a solution.

Again, this doesn’t have to be a full-time employee. But you can pay for a customized report to help you quickly identify weaknesses and correct them.

Technology is your friend

Technology is constantly changing the way we handle and track our business finances. Nowadays software can notify users of upcoming payments a few days before its due date. This gives you sufficient time to contact your customers to ensure on-time payment.

But new software doesn’t stop with invoicing and payment plans. You can manage product life cycles with technology and shorten development times through collaboration between technical designers, creative designers, and commercial teams. This reduces repetitive tasks and allows for quick adaption.

Incorporate ERP in your business

Enterprise Resource Planning (ERP) offers precise, up-to-date information on the movement of resources and goods. You can even manufacture a specific quantity. This lowers the total levels of inventory, cuts delivery lead times, and minimizes stock-out situations.

Predict your finances

It may seem simple, but running your business without a precise and elaborate cash flow estimate could bankrupt your business. In order to stay on top of your cash flow, predict your quarterly and yearly finances in a spreadsheet. You can adjust and tweak these predictions throughout the year.

Hint: Not sure where to start? Get your paperwork ready and move to some basic invoice management systems, and you're halfway there!

Sometimes it’s more affordable to seek help

Giving a sustainable structure to your financial model from the start will help your business expand in the right way. If you are really struggling, it is worth investing in professional support.

There are several online accounting service providers that can help you start your fashion brand on the right financial footing. These firms have assisted hundreds of small businesses by providing a dedicated accountant for a wide range of accounting, tax, bookkeeping, and payroll services.

Finances à la mode

A successful fashion brand isn't just a sweet pair of shoes or a sophisticated logo. It is the marriage of the fashion and financial world.

And at the end of the day, small business owners who would rather design than keep books are in luck. You don't have to go at it alone. Whether you decide to use automated technology or hire an accountant, you have the resources to build your brand. ­­­­

DISCLOSURE: No financial interests associated with the companies discussed in this article.

The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer



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