Turning over a profit is one thing, but actually consolidating it and not wasting it is another thing entirely. Quite simply, if your business is to prove successful, it cannot be squandering the money that it makes — it needs to be saving money where it can, and making sound investments wherever possible.
For this to be the case, you need to set about the task of strengthening your business’ financial position right away. To see how that can be achieved, be sure to check out the guide below.
Improve your accounting department
When seeking to strengthen your business financial position, it makes perfect sense to start with the individuals that deal with your cash flow directly, your accounting department.
In order to ensure that the accounting professionals that you employ are up to the task of fortifying your finances, you should resolve to improve their workflow. There are a number of different ways to do this, from rewarding them for good work to sending them on an educational course. In regard to the latter, allowing your accounting staff to take a Master of Science in Accounting (MSA) will see them learn all about forensic accounting, business intelligence, and corporate finance. With this new knowledge to fall back on, your employees will no doubt be far better equipped to strengthen your finances.
Rest assured, granting your staff members with the opportunity to step back into education does not necessarily have to mean that their lives as working professionals need to suffer. If they were to take an online MSA course at Suffolk University, for example, they would be able to receive an in-depth accounting education without having to step foot inside of the educational institution. Their learning would take place solely via the web, meaning they’d be able to remain 100% focused on your business and its financial needs.
Ensure your best interests are always protected
Whenever you enter into a deal with a new customer, you need to ensure that your business’ best interests are protected. Unfortunately, there will always be disingenuous clients out there who seek to make use of whatever it is you offer without paying you for your services. For this reason, before you make any formal agreements, you must get the condition of the sale agreement down in writing. On this agreement, you should outline all of your terms and conditions, you should make it clear how much time your debtors have to pay you, and you should clearly label all the percentages you are going to apply should the payment deadline be missed.
Recover any outstanding debt you are owed
You’re never going to strengthen your finances if you continue to allow your customers and other businesses to get away with not paying you. Quite simply, if you are owed money, no matter how big or small the amount may be, you need to recover it.
When it comes to recovering outstanding debt, you have a number of options depending on the severity of your particular circumstance. If you are owed thousands by a customer that is point-blank refusing to pay up, for example, then you might want to consider outsourcing the task of collecting your debt to a debt collection agency. Should the case not be as serious (yet still serious enough for you to recover the money you are owed), then you should simply remind the debtor of their obligation to pay up.
Reduce or rearrange your expenses
If you don’t take time to analyze your expenses every now and again, your business could very well be overspending for absolutely no reason whatsoever, and you wouldn’t even realize anything was wrong. You should take time to study your spending pattern, and you should reduce or rearrange your expenses depending on what kind of information you unearth.
Some options that you have in this instance include:
- Putting a periodic payment plan in place for your particularly large expenses
- Finding an insurance company, bank, utility provider, and stock supplier that is going to offer you lower rates and a better deal
- Tweaking the timing or quantity of your stock procurement so that they coincide with periods of higher cash flow
When drawing up your next business plan, you shouldn’t forget to outline all the ways you intend on strengthening your business’s financial position. As you get on with this all-important task, be sure to remember everything that you’ve come across in the guide above. Doing that will no doubt see you consolidate the profit that you make and improve your financial standing once and for all.