Financial Advice for Business during Tough Times
It may sound like the ultimate challenge when you’re starting a business during a recession or growing a business during tough times, especially if you’re an entrepreneur or small business owner. 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. There are many strategies for survival and growth in business; however, there are also common denominators that are characteristics in small business success during tough times, so here are a few strategies to consider.
Cost management is a prime importance for business, which relies on credit, to grow and profit and more so in a small business enterprise, such that when tough times come, your well-planned and well-thought of budget management and implementation will be your most important tool factor to allow your business to survive during tough times and continue to grow. 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.
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.
Have Updated Monthly Statements
One of the basic must-do in any business is to prepare and review the following monthly statements, which 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
The following are valuable advantages, if you automate and use an AR software to help improve your billing and collections: 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.