Financial Tips for Business through Tough Times
For a small business owner or entrepreneur, starting a business during recession or growing your business during tough times can be the ultimate challenge. With agility, planning and the right resources, small businesses may even spur growth even during tough times. Depending on what business is being built up, one can come up with various strategies and growth process, but there are also common factors which have seen small businesses succeed even during tough times, so the following are a few strategies to consider.
Careful management of costs and expenses, through well-planned budgeting and implementation, in your business is an essential factor for your business to continue to grow even during tough times, which will prove to be your valuable asset to succeed in your small business, most especially if the business relies on credit. To be able to do so, an accurate system for profit and loss projections must be established, as well as forecasting these projections on both short and long term periods.
Anticipate the Pros and Cons in Business
Always have that attitude of anticipating the pros and cons of the business, knowing for a fact that there are existing risk factors, and by doing that, it would help you a lot if there’s a separate emergency fund which can be used if there’s a need for you to institute some drastic change in your business strategies to be able to continue in your business operations. The value of emergency fund will be an important fall back tool for your business to continue, especially if you have to necessitate some changes in your business.
Monitor Your Cash Flow
Monitoring cash flow regularly and managing it properly are important tasks of any business owner, since this can spell the difference if your business is well managed or not. By following up regularly on your cash flow standing, you can have a better assessment if your business needs capital requirements or your one-time investment is enough.
There are three monthly statements that must be prepared and reviewed, and they are: balance sheet, profit and loss statements, and cash flow statements. Any responsible business owner has the duty to regularly keep an accurate account of all the money entering and leaving the business, including the constant updating of your budget and monthly statements.
Better Billing and Collections through Software Applications
Automate your accounts receivables (AR) process, using the appropriate accounting software, to improve your billing and collections process, and in that way you get these advantages: 1. E-invoicing offers AR departments the freedom to produce both paper and electronic invoice format in order to match every customer preference, 2. Moving from manual to automated invoicing not only increases AR departments efficiency, it can also reduce processing costs by 44%, 3. An e-invoicing solution allows companies to send out invoices as they are prepared in real time, giving customers the chance to immediately initiate their internal payment process and getting you paid faster, and 4. Automatic emails to customers reminding them of their payment owed helps speed up collection times, reduce calls, and improve customer relations.