Don’t Drive Your Business to Bankruptcy
With all the hard work you have put in to get your small business up and running, the last thing you want to do is make mistakes that can spell disaster. Unfortunately, many new small businesses fall victim to these errors that can lead to bankruptcy. More often than not, these blunders could easily have been avoided if the entrepreneurs had paid closer attention to the basics of financial management and accounting.
Avoid these common small business financial mistakes:
1. Non-existent or Irregular Bookkeeping
Basic accounting teaches you that everything that goes in and out should be properly documented, no matter how big or small your business is. Without proper bookkeeping, your finances can easily fall into disarray and you will be faced with confounding issues on cash flow, liquidations, and inventory. Maintaining the services of a bookkeeper is more of an asset than a liability. They don’t take much of your operational budget but instead make sure that your finances are properly ironed out.
2. Lack of Cash Flow and Budget Forecast
For your business to function well, you need to create your own cash flow and budget forecast. Without this, you will have a tendency to spend far more than you can afford and your company will be facing a zero reserve balance sometime soon.
3. Lack of Credit Control
Your business may be booming, but with insufficient credit control, your potential earnings go down the drain. It’s critical that you have a procedure in place to make sure you get paid on time. Whether the person responsible is you or another staff member, follow-up and payment reinforcements must be timely.
Working with an experienced bookkeeping service can help you avoid these ruinous financial mistakes. It’s more affordable than you might think and you’ll come to find that you can’t afford not to.