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Finance management is a challenge for many businesses, particularly for SMBs and SMEs. If you’re having issues with a business financial struggle, it will feel like a chore. You might fall into bad financial habits that can harm the business in the long run.
Take a breather. Here are a couple of things you can apply to your business so you can stay on top of your finances.
Invest in Growth for to Avoid Future Financial Struggle
Setting aside money to look into growth opportunities is vital to business success. Too often, a business will stick with their tried and tested technology while the world is gradually easing into better technology. But it’s crucial to your business financial health to be open-minded about upgrading your business and processes. Doing so will ensure growth and profit.
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A business that wants to continue growing needs innovation to attract the best employees. Plus, your customers will appreciate the enhanced level of service. Employees will also appreciate that investment in the company and their careers. All of these will create more value for your business.
Set a Good Billing Strategy
Every business has late-paying customers. Nonetheless, there are many strategies you can put in place to positively manage cash flow and avoid financial struggle. Aim to ensure that your company’s financial situation will operate on a healthy level. If you struggle to collect from customers or clients, consider using creative approaches.
Unpaid invoices often lead to cash flow problems. This is a top cause of business failure. However, instead of badgering late-paying customers, try a different approach like changing the payment terms to “2/10 Net 30.” In other words, if the customer pays the invoice within ten days, they get a 2% discount on the total bill. But if they can’t pay within that timeline, the terms are full payment due in 30 days.
Spread Out Tax Payments for Less Financial Struggle
If you have issues with your quarterly estimated tax payments, try making payments monthly. This way, you can start treating tax payments like all other monthly operating expenses.
Don’t Be Afraid of Loans
Yes, loans can be scary. But this is true only if you don’t have a payment strategy in place when taking a loan up. Proceeds from responsible loans can improve your cash flow and your company’s overall financial health. Thus you’ll have fewer issues paying suppliers and employees on time or keeping your business afloat while waiting for payments to come. You can even consider a creative option of getting a consumer proposal if you aren’t sure about getting a loan.
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Keep Good Business Credit to Avoid Financial Struggle
Your growing company may cause you to seek out more commercial real estate, get additional insurance policies, or acquire more loans for a facility upgrade. Having good business credit will give you a faster approval time.
Keep good credit by paying all your debt funding on time or as soon as possible. Also, don’t let your business credit cards run a balance extensively and only take out loans with interest rates you can afford. Shop around for funding that you can comfortably repay and thereby avoid financial struggle.
Did you know that you can buy or refinance your business property with greater savings? If you’re unhappy with your existing business loan provider for any reason, you may consider refinancing with a better working capital provider.
Working capital financing can be many things, including venture debt financing, supply chain finance, block discounting, overdraft, social enterprise package, or even COVID-19 relief loans. Check out the available line of working capital from your trusted financial provider.
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