Running a business is no easy feat. It takes a lot of hard work, relies on well thought out strategies, loyal customers, and some difficult decisions. One of the key factors when it comes to running a business to help all these other factors happen is – finance.
Without finance, not much is possible, and with business, even the smallest financial issue could create a colossal setback. Unfortunately, not all financial issues are preventable.
Natural disasters, economic struggles, and pandemics, amongst other factors, can see businesses fall behind financially, impacting their credit scores, loans, and the business’s financial health.
This article will discuss how to achieve good financial health as a business for those who are starting from scratch or are facing some unfortunate setbacks.
Track Expenses in Real-Time
It is easy and often tempting to wait until the end of the financial year to face the business’s expenses for that year. Still, tracking and logging expenses as you go not only prevent a headache later down the line but also helps you keep track of your financial decisions. To have an easier business process, equip your business with employee expense reimbursement software that can help in creating faster and more accurate business expenses record. This information can then be used to encourage better and smarter choices.
Build up Your Business Credit
Not only does borrowing money and paying it back on time help lenders know that you are reputable when it comes to a loan, but it also means if times get tough for whatever reason, you have a much better chance of qualifying for a business loan or line of credit. Just make sure you take one out with a reliable and trustworthy company such as Biz2credit.
Preventative Plan
If you find that you want to learn about preventing a financial disaster, then the first step you need in place is a preventative plan. This will ensure that worst-case scenario, you are prepared if something damaging happens and, best-case scenario, it will help to keep you out of the red. Stats do not look too kindly upon business survival rates, as only half of businesses survive their fifth year, lowering to 30% for the 10th year to stay financially focused.
Know Your Numbers
The most important factor to financial health for your business is staying aware of it. Knowing your numbers close to inside out will help you keep track of your outgoings, incomings, payroll, expenses, and anything else financial that should be monitored. This is not only important for keeping an eye on anything that could go a miss, but it is also a great strategy to observe when the business best makes its money and what might not be working as reflected in the numbers.
Keep on Top of Bills
Keeping on top of bills is seldom negotiable when it comes to financial health. All businesses are expected to have debt but keeping up with those repayments can make or break the business. Missed payments can incur higher interest rates and fines, which can quickly waste money that does not need to be. However, setting up automatic monthly payments can take the stress out of remembering and take another thing off your mind.