Last year, the number of companies going bust reached an all-time high, according to a report from the BBC. There are many potential reasons to get your company’s finances in order to ensure sustainability and growth:
- The long-term effect of COVID-19 on the economy
- Companies failing to modernize or keep up with their customers
- Changing consumer behaviors and spending habits
- Poor cash management and cash flow
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Business Owners Finances
Fortunately, business owners can protect themselves from this fate by diligently reorganizing their company’s finances. This means they can ensure they stay afloat, even during quieter sales periods.
With that in mind, here are some tips that you can use to get your company’s finances in order and ensure that you achieve business success.
Monitor your spending closely
. According to a recent study, “40% of companies have little or no visibility into how money is spent” in their day-to-day operations. This makes it nearly impossible for them to stick to a specific budget or find ways to save money.
As such, moving forward, you should carefully monitor and track your spending. Keep hold of every receipt and digitally record every single dollar you spend, whether you’re buying a client a coffee or investing in new equipment and tools.
Seek out expert advice To Get Your Company’s Finances in Order
If you are going into debt to keep your company afloat, seeking expert advice and guidance is crucial. Experts, such as Alex Kleyner, CEO of National Debt Relief, can help you navigate your way out of this situation without having to close your doors for good.
This will provide you with much greater peace of mind moving forward, as you know you’re doing everything possible to protect your company and put your best foot forward.
Prevent cash flow issues
Working diligently to avoid cash flow issues can also help you get your company’s finances in order, especially if you are continuously dealing with late payments from clients.
Fortunately, there are a few different ways in which you can set about improving cash flow within your company. For example, you can:
- Set clear expectations with clients ahead of time. Tell them up front exactly how much you will charge for your goods and services and when you’ll expect payment.
- Asking for a percentage of the payment up front. Asking for a small upfront payment can also help to remedy cash-flow issues.
- Sending out reminders when invoices are approaching their due date. Typically, customers/clients have thirty days to pay up after an invoice is received, make sure its stated for them to read it, which is considered late. If the date is approaching and you still have not heard from the client, don’t hesitate to follow up. Sometimes, they may have forgotten to send the money over. You can send these reminders via email, your invoicing app/software, or phone.
- Add interest to late payments. When a payment is late, you can start to add interest. Do not hesitate to do this, even if you worry it could sour your relationship with your client. Otherwise, it means that they are much more likely to pay late in the future, and you deserve to be paid for the work that you have put in.
Make sure your pricing is competitive
While keeping your costs low may seem like a great way to attract customers, especially in the current climate, you should also ensure you are not selling yourself short. After all, while your products and services may be cheap, that does not mean that your manufacturing or running costs are similarly low, meaning that you’ll struggle to break even.
As such, now may be the perfect time to examine your pricing and ensure that you are pricing yourself competitively. The easiest way to do this is to check out your competitors’ pricing.
Consider hiring an in-house accountant To Get Your Company’s Finances in Order
The majority of small business owners choose to tackle their finances themselves. However, unless you have a financial management background, this can be difficult in the long run, especially as your finances become harder to stay on top of.
This means that you are far more likely to make mistakes that could lead you to bankruptcy.
This can easily be remedied by hiring an in-house accountant who may provide a cash flow statement for you. While this may seem costly, their expert advice and guidance are likely necessary when it comes to keeping your company afloat and resolving any issues you are currently facing. Without them, you’d be relying on guesswork to get by.
Taking out a business loan
In some cases, you may also benefit from taking out a business loan that will allow you to get back into a good place. For example, this money could be used to invest in new equipment that will save you a great deal of time (and money) in the long run.
Alternatively, you could use these funds to hire new staff who can take your company to new heights, ensuring you remain as relevant as possible in a competitive business landscape.
Final thoughts: Get Your Company’s Finances in Order
You aren’t alone if you’re currently worrying about your company’s finances. After all, this is the number one reason businesses across all sectors close up shop, often within just a few years of opening their doors.
Fortunately, there are many steps that you can take to turn things around and help get your company’s finances in order in this regard, including:
- Monitoring your spending closely
- Seeking out expert advice
- Preventing cash flow issues
- Making sure that your pricing is competitive
- Hiring an in-house accountant
- Taking out a business loan
In short, following the advice outlined above will help improve your bottom line, ensuring that you’re generating enough profit to keep your business around for many years.