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. It has been proven that with agility, planning and the right resources applied to small businesses, those tough times were there to spur growth for these businesses. 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.
For small businesses, which rely on credit, managing well costs and expenses through well-planned and well-thought of budget management and its implementation, will be the most important tool for the business to survive during tough times and to continue to grow. To be able to achieve a well-planned cost management system, you may have to provide an accurate system of profit and loss projections and, at the same time, make short and long term forecasts.
Anticipate the Pros and Cons in Business
Since there are many risk factors in maintaining a business, it is also important to anticipate any possible scenario that may affect your business, so that putting up an emergency fund can help you finance your decision to change some of your business applications or operations for your business to be able to survive. 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.
Supervise Well on the Cash Flow
Keep always an eye of your cash flow and manage it well, since this is a vital factor to allow your business to succeed and survive. 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.
Prepare and Review Monthly Statements
Every business must have a monthly preparation and review of the following: 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.
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.