If there’s one thing that many business owners tend to struggle to grasp, it’s the financial side of the business. A common thought is that some people are maths people, and some are English people in high school. If you were someone who was absolutely terrible with numbers, sitting down with your accountant can be like trying to understand how to do a Rubix cube. But it’s one of the many things that you have to work to understand over the years.
The financial implications that can come if a business owner doesn’t truly understand their books can be huge. Because a small business who only has perhaps one or two employees, or perhaps is still running solo, is not going to be able to afford someone to sit and do the books every single day. So it becomes down to you to make sure that you can manage the workload that you have, as well as manage your finances. For a growing business, there can be some big implications that we want to talk about. Keep on reading to find out more.
Invoices & Payments
This can be a super hard one for many business owners to grasp. Invoices and payments from customers can come in thick and fast when your business is growing, which can eventually lead to discrepancies if you’re not logging it right. Just a few missed invoices and you’ll be completely out of sync with your company.
One thing certain businesses can do, such as those with a freight fleet, is using freight factoring services. This is where invoices and bills can be converted into cash, and then be used to manage repairs on the fleet. It’s an easy way of using a service that’s going to help you to better manage your finances. We’d also recommend using an online payment system for invoice payments. It’s far easier to track rather than writing it down in a book!
Another way to streamline your invoicing and payments is by adopting AP automation tools. So, the whole point is to reduce the time and effort needed to manage invoices and payments(that includes what the business needs to pay), which ensures everything is logged correctly and on time. Besides, solutions like these help you track payments, avoid late fees, and keep your business running smoothly, even as the number of transactions increases
You must get your invoices in order and collect the money that’s owed to you if you want to succeed. Therefore, another option is to look into using and learning more about invoice factor. It’s where a company sells the value of outstanding invoices to a third-party company called a factor. The factor pays the company in two installments. It’ll provide you with working capital and help you avoid credit risk clients. It’s ultimately your responsibility to ensure the payments are made and the numbers and your finances line up correctly. Make your job easier by considering this solution so you can move forward and continue to grow your business. However, if you have customers who have failed to pay or are accumulating debt within the company, it can be a good idea to look into the services of companies that can buy your debt. Read these Jefferson Capital Systems reviews to see if this would work for you.
Everything the Law Requires
The law requires you to do so much with your business, not just relating to your finances. You have to work within certain trading laws, have to be registered as a business, and you have to be paying your taxes right. We’d recommend making sure you let your accountant handle it all. So many businesses miss tax payments, or even commit tax fraud without knowing it. If you have a high percentage of cash flowing through your company, figuring out the tax owed can be so hard, and the implications, if you get it wrong, are huge.
Keeping Accurate Books
Keeping accurate books is another hard one to manage. You need to make sure that you’re logging everything perfectly, which should never be done on paper. There are now so many financial software out there that can help you to properly manage your money, whilst also keeping track of outgoings and incomings. The accurate books will make it so much easier to pay bills, pay taxes, and utilise the money that’s coming into the business.
