Those businesses involved with shipping and exporting abroad are well aware of the potential challenges they must overcome in terms of logistics and financial management.
Small businesses which are still becoming established and have less funding must be particularly careful, so here is some information on how to manage your finances when shipping and exporting.
Check Your Budget
First off, it is important that your budget is well organised and factors in every cost which may be accrued through shipping. Bear in mind that a licence is needed if you are exporting machine tools, computers and electronic equipment, amongst other goods, otherwise you might be heavily fined for noncompliance.
Add up the costs of shipping, including outside costs like insurance, and make sure it is kept up to date and accurate. If, like most businesses, you are using a courier or logistics service such as TNT, factor in their fees as well.
Manage Invoices Effectively
Whenever sending goods to another country, you will likely be invoicing the recipient for payment. Invoices often usually take between 30-120 days to be paid, which can cause serious cash flow issues when not managed properly.
Make sure you know how long your invoices are likely to take to be paid, and credit check your customers before doing business with them to see whether they are likely to pay on time. If late invoice payments/payment waiting times are leading to serious cashflow issues, you could ask for payment upfront instead, or offer incentives for early payment, such as discounts.
Method of Transport
One final point to consider is the means in which your goods are transported. Different methods cost different amounts, as does the distance your goods will be travelling. Based on how valuable your goods are, and how many you intend to send at a time, you will need to choose the most cost-effective method of transportation.
Sending goods by road, for example, is a fairly low cost method, but not viable to those sending overly large or large amounts of products. Sending them by air is usually the fastest method, but also one of the most expensive. There are many more methods and factors to consider, though, so make sure you research extensively to find the best one for your business.
Once you have constructed an effective system for transporting your goods, your business finances will be far easier to manage. Make sure you manage your documentation well too, and find the most cost effective method of transport.