You always have to consider the issue of money when you are running your business. It’s important that you take the necessary steps to keep your business in the green and avoid slipping into the red. This is honestly a lot more difficult than most business owners realize and it can be the first sign of doom for a company.
Ultimately, there are a lot of mistakes and problems that you can run into when managing your finances. So, let’s explore the potential financial foes here and ensure that you know how to combat them the right way.
The tax man cometh
Let’s be clear, the taxman and HMRC are not your financial foes. No, your enemy is going to be a lack of attention to the right details. Or worse, a direct attempt to pay less in tax. You must make sure that you are avoiding both these issues like the plague.
When you complete your taxes, make sure that you are carefully considering all the incomings and outgoings into your business account. If deductions are relevant, do explore the rules and regulations around this issue. You need to make sure that you are being careful not to overplay your hand here because this can lead to disaster.
If you do notice a mistake with your tax, it’s important to notify them immediately. You should not let them figure out the issue for themselves as this will always bring greater problems for you. It’s far better to own up to your mistakes.
If you have a small business model that is fairly simple to manage and run, you can probably avoid the issue of hiring an accountant or expert to complete your taxes. However, if you have various incomes for your business model and multiple expenditures, it is advised that you do recruit an accountant. They will be able to ensure that there are no issues with your taxes and keep you on the right path.
Do be aware that there are ways to legally reduce the level of tax that you need to pay in business. An accountant will also be able to help you explore these possibilities and ensure that you are approaching this the correct way. It’s worth noting that the line between legal and illegal is far more blurred than most people would like to admit. Particularly, when exploring the issue of finances.
Unpaid invoices used to largely be a problem for industrial business sectors like manufacturing. However, times have changed and today, it’s remarkably common for there to be issues with this in a variety of other sectors as well. It’s possible and indeed likely that suppliers aren’t gaining the payments they need either.
So, what’s going wrong here? Well, usually, a company is providing a product or service to a company. The latter business won’t pay for that product or service until they have profited from it themselves.
This leaves the company out of pocket and potentially unable to afford their own expenses. Worst still, many unpaid invoices go completely overlooked for a long time. The company doesn’t realize that these lost payments are the main reason why they are losing a lot of money.
There are a variety of ways to combat these financial foes. You can send polite reminders to businesses that owe you money. You can also consider implementing an automated system. This is going to make it easier to handle issues here and ensure that you can keep track of payments more effectively.
Alternatively, if this is severely hurting your bottom line, then you could sell off your unpaid invoices to another business. They’ll take care of them for you and you will access the capital that you need. This may burn bridges with former clients and suppliers but if they aren’t paying they may not be of much value to you anyway.
Money laundering madness
It’s highly unlikely that you have a plan to money launder. You may not even be aware of what this is, so let’s break it down. Money laundering occurs when a criminal wants to hide their money in a legal company. The money is diverted into the incomings for the business and it helps the criminal avoid the detection of their enterprise. Otherwise, it’s obvious to the authorities and in particular the taxman that someone is earning money without actually having a job.
So, where do you fit into these financial foes? Well, as a business owner, you could be managing a company that is highly exposed to the issue of money laundering. Some of the most exposed industries include legal, accountancy, investment, and insurance to name just a few.
So, if you’re involved in these areas of business, you need to make sure that you have the right set up in place. This means that you should ensure you have explored money laundering regulations. By doing this, you can keep your business compliant with the latest standards. These are changing all the time so if in doubt, do consider using an expert solution to handle this for you.
It’s tempting to go big with your business. You may be keen to spend as much as possible and ensure that you put your company in the strongest position. However, overspending in the wrong areas will actually make your business far weaker in the long term. It could limit your potential on the market and leave you facing massive financial issues.
So, how can you avoid the overspend? Well, one of the best ways is to keep your business as flexible as possible. For instance, you can consider whether you need or will benefit from a business office. This is a massive expense and in most cases, the answer is going to be no, you don’t need this type of set up. You might even find that you can run your business from home and you would be amazed by how many owners are effective doing just that.
There are other ways to ensure that you are able to save in key areas when running your business too. For instance, you should be cost comparing the services and products that you require in your business model. It’s important to make sure that you are getting the best deal on the market without it impacting the level of quality.
The main point is to make sure that you are keeping a check on your spending. Again, you may not want to pay the money to hire an accountant and that’s totally understandable. An alternative option would be to invest in a cloud account software. Many of these are completely affordable and will allow you to keep a check on your spends in real-time and keep an eye on these financial foes.
Finally, you need to make sure that you are putting protections in place for your business and indeed your finances. When you run a business there’s a lot that can go wrong For instance, cybercrime is on the rise. BY 2021 it’s expected that there will be a hack on business ever 3 seconds. As well as this, while residential theft is far more common, there is still the chance that someone could break into your company and steal everything. Or, how about fire? If you do suffer a fire on your business property everything including your employees will be a risk.
To handle the issues here, it’s advised that you make sure you are putting an insurance plan in place. Ideally, you should have a few different types of insurance cover. This will guarantee that you don’t have to worry about issues with a disaster in your business leaving you out of pocket. When you do seek out an insurance cover, make sure that you consider what is and isn’t part of the plan. You need to complete as much research as you can before settling on a final choice.
Of course, this does also include the issues that can arrive with your employees. Employees are dangerous for your business and this is definitely true when you consider the threat of a PI lawsuit. Companies in the UK have been inundated with these claims. Many struggles to stay afloat. You can avoid this issue if you invest in workers’ compensation. This will ensure that if an employee is injured, you will be able to pay them the money that they need. The benefit of doing this is that you don’t have to worry about a heavy cost eating away at your business when a lawsuit comes through. You can ensure that the future of your company remains secure.
We hope this helps you understand some of the financial foes that you can run into when managing your business. It’s important to be aware of the challenges so that you can handle them effectively. This largely involves knowing the right service to use and understanding your financial responsibilities as a business owner. If you do this, you can make sure that you keep your company green and healthy for the long term.