How To Stay on Track to Meet Your Businesses Financial Goals

Friday, April 10, 2020, 6:00 AM | Leave Comment

Having a plan and financial projections for every quarter and year are common practice and great for establishing a clear route for your business, but none of these can prepare you for unforeseen obstacles.

Sharp moves in the financial markets, global economic issues, geopolitical turmoil, civil unrest, and internal staff conflicts are only a few of the many things that could go wrong while you’re trying to hit your financial milestones.

To help you stay on track here are four tips:

How To Stay on Track to Meet Your Businesses Financial Goals

  1. Avoid Adding to Your Existing Debt

    Every business accrues debt at some point in its lifespan. Successful businesses, however, are able to minimize their existing debt levels while managing to consistently grow revenue. To systematically eliminate your business’ debt, assess and rework your budget. Before you can fix your business finances, you’ll need a comprehensive understanding of your situation. Assess how your business’ capital is being spent and if it’s the best use of your financial resources.

    Getting in touch with your creditors/lenders can also yield lower interest rates for your outstanding balances. Give them a call or email to see if you can negotiate lower interest rates on your loan. For credit cards, you can move your current balances to a lower interest rate credit card, usually one with zero percent APR for the first year. As long as you’ve been making regular payments on time and you can prove that your business is financially stable, you should have room for negotiations.

  2. Streamline Your Process of Receiving Payments

    Delayed payments from customers can cripple your operations. You want to make sure the process is smooth and effortless. The exact process of receiving payments will depend on your business model. For instance, if you’re selling a service, invoices should be sent out periodically throughout the calendar month. If you’re selling goods, credit card payments are your bread and butter. For web-based stores, make sure you have a shopping cart option that makes it easy for customers to check out.

    If you haven’t already done so, upgrade to an automated payment system. The advantages of automating payments for your business is twofold – first, you guarantee on-time payments for your distributors/suppliers thus maintaining positive partnerships and, second, you avoid any late penalty fees.

  3. Use Reliable Accounting Software

    Having good accounting software lets you precisely and conveniently monitor your business’ KPIs or key performance indicators. KPIs give you a clearer picture of how your business’ finances look under the hood. You’ll need to know exact numbers including operating expenses, average monthly sales, customer costs, etcetera. This helps you adjust your current business model/strategies in order to meet your business’ financial goals.

    Some highly recommended accounting software products out there include Quickbooks and Xero. In addition to picking good accounting software, make sure to back up your financial data including receipts and balance sheets onto the cloud. This gives you a backup if ever your hard copies get compromised. To help you manage your accounting software, bring in an experienced CFO who can handle the forecasting and strategic accounting guidance for your business.

  4. Have a Financial Safety Net

    Having a financial war chest for your business gives you the ability to make explosive moves, such as expansion to new markets or acquisition of smaller businesses that complement yours. In times of economic hardships, having a safety net to tap into can also give you runway so you can weather out the storm. Similar to having a personal emergency fund for rainy days, your business should also have its own.

    Aside from having cash set aside for this purpose, you can also acquire high-value assets, such as equipment and intellectual properties, that you can liquidate during financial emergencies without such liquidation having any major impact on your day-to-day operations. While this may slow down your growth trajectory, it does help your business survive and remain open.

Final Thoughts

Staying on track of your business’ financial goals is about staying organized, having an airtight plan, using the right tools, and having an all-encompassing presence so you don’t get blindsided by technical issues, internal conflicts, or macroeconomic factors. If you follow the four aforementioned tips, you’ll find that hitting those milestones becomes effortless and efficient.

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