Unless your business is in the financial services industry, you probably didn’t start it so that you could spend a lot of time looking at a balance sheet. However, failing to address financial issues at your company can be dangerous. You may not love examining figures, but taking some steps to ensure financial fitness will help your business keep humming along for years to come.
Understand Your Finances
When you are working to improve your financial standing, there’s no substitute for being well-versed in your own finances. You need to understand them, not just on a general basis, but in terms of knowing what is happening with them weekly or even daily. This will give you insight into what’s bringing in the most money, where your money is going and where you might be wasting it. You may need to investigate more deeply to really get a sense of where you might cut spending, including talking to your staff and customers, but an intimate knowledge of the day in and day out of your company coffers will put you in a good position to make the right decisions about the other tips below.
Have a System for Invoicing
How’s your invoicing? Do you send them out regularly? How do you keep track of unpaid ones? Are there unpaid ones? Do you clearly state your terms for payment and penalize late payers? Late and unpaid invoices can be costly, causing you serious cash flow problems that can ultimately really hurt your business. You may want to spend some time following up on debts that have gone unpaid for a long time or consider having a collection agency do so.
Tools that Improve Workflow
The key to financial stability in business isn’t trying to avoid spending any money at all. It’s about spending wisely, and doing so can actually save you money in the long run. This is the case for tools that help you or your employees work more efficiently, such as telematics. Telematics exists where information processing and telecommunications converge, and in fleet management, it can be useful in transferring data in real time back to offices. This can help managers keep up with costs and monitor safety and compliance. Talk to your employees and to other business owners in your industry to learn more about what tools might be useful in your workplace.
Pricing and Payments
There are several actions that you can take around pricing and payments. First, especially as food and energy prices soar, you may want to consider either raising or lowering your prices. It’s possible that you’re past due for an increase. There is also a phenomenon in which setting your prices too low causes others to undervalue your product or services.
On the other hand, even small markdowns can sometimes attract new customers or motivate current customers to spend more. You could even do both at the same time, marking down any surplus that you have and marking up things that seem to be in demand. In addition, considering expanding the number of payment options that you offer your customers. Offering credit or accepting cryptocurrency or other payment systems besides debit or credit could mean your products or services are accessible to more people.
Review Your Assets
Look over what you own and make sure that you are using it all. If you have assets that you aren’t using, consider selling them. If you aren’t using them now but you don’t want to get rid of them, you may want to lease them. Above all, don’t spend money storing anything that you don’t need. Depending on what you have, you could sell items online, or you could look to an auction house either online or offline to do it for you.