Being successful in business means also being successful with finances. Too many businesses go under not because they were bad businesses, but because they made unwise financial decisions that snowballed over time. If you want to create a business that stands the test of time, you’ll need to do things that improve your business finances and your bottom line. The good news is that even though it might sound daunting, small improvements add up over time. Creating a thriving business is within your grasp when you do these things to help benefit your business financially.
Use a professional accountant
There is no reason for a small business owner to handle the accounting unless they are an accountant themselves. A small business tax accountant is a wise investment toward the health of your business. A tax accountant can help you find all of the deductions and loopholes that your business can qualify for. Additionally, they can keep you from making financial decisions that could be fraudulent. Using a professional accountant is one of the best ways to manage your annual finances for your business.
Create a projection plan
Planning ahead is critical when you run a business. A good projection plan will include all the ways you plan to make money, future expenses, and expected revenue. If you don’t have any projecting done on your business, you are essentially doing the business equivalent of living paycheck to paycheck and this is a dangerous position to be in. Projecting your revenue and expenses is a smart business move for numerous reasons. You’ll find that you can make better decisions with the surplus that comes in and when you want to do new projects or add new products when you have a plan in place.
Leverage business debt strategically
Don’t go in the hole just because you’re on a sinking ship. Businesses that use different forms of debt either through a line of credit, merchant cash advance, or other business loans need to do so strategically. If you end up in a situation where debt is the only way to keep the lights on in your business, you need to think through your business plan and how the debt can be used to improve your cash flow, so you don’t get into a tight spot again. Too many businesses take out loan after loan only to realize that they did it reactively instead of proactively.
One strategic way to use debt better in your business is to take out a loan to purchase seasonal items that you know will sell in the near future. By using a loan instead of cash flow to buy that inventory, you’ll have more money to continue paying the bills.
Invest in technology to track revenue
Tracking on paper is antiquated and a great way to get yourself into financial trouble. Invest in technology instead to track revenue and keep your business on track. Using technology makes it easier to enter data and then use that data weekly, monthly, quarterly, and annually to track how your business is doing. You can get real-time snapshots of the financial health of your business as well. Investing in technology can be as simple as using bookkeeping software or more robust to connect all your credit cards and invoices in one place.
Streamline processes
Evaluate your processes to determine if they are serving your business or not. Some processes are done simply because it was the best way when you started the company, but now, there are better ways to get the same outcome. Utilizing technology and even outsourcing to contractors can help your business finances in the long run. Streamlining might mean taking a look at redundancies, programs that all do the same thing, and consolidating them to work differently. By streamlining processes you can save money on productivity and on programs that you may no longer need.
Final thoughts
Improving your business finances takes a plan and sticking to it. If you’re wise and make strategic decisions, your business is more likely to thrive. You’ll always have money for payroll and the rent because you won’t be scrounging by each time you make a sale. You’ll learn to create projections and make long-term decisions versus living moment by moment.