Improving the finances of your business is of great importance to prevent it from failing. Although there is no specific date to do so, you can take advantage of the beginning of the year. Remember that it is vital to monitor your finances constantly to achieve your goals.
Start a new year, allows you to set the growth goals of your business and define the strategies that will help you meet it. To improve the finances of your business, it is important that you are regularly monitoring the financial indicators of your company.
We share some of the indicators that should be part of your plan. These indicators will be of great help to you to know the financial status of your company.
The first thing you should be clear about is how much money you spend and see how to optimize your resources. Making a list of your fixed and variable expenses, will allow you to create strategies to reduce costs.
Once you have it, evaluate which costs you can eliminate and which ones you can reduce. One option is to look for suppliers that offer better conditions or even eliminate some policies of personnel expenses.
Remember that the more you spend, you reduce the liquidity of your business and the ability to pay for financing in the future.
At the beginning of the year, you have the opportunity to define a more orderly collection process, both for your customers and for your sellers. This with the aim of taking care of the liquidity of your business.
Many times, you may find that your level of sales and billing rises, however, is not reflected in your income immediately, and all due to poor management tracking charges.
The ideal thing for this point is to define collection dates and determine if you finance your customers’ purchases at 30.90 or 120 days. The follow-up given by your sellers or finance area will be essential to comply with your collection strategy.
Define a budget for your business and do your best to fulfill it. Do not forget to include concepts that help you create long-term value. For this, define an amount to invest in technology, marketing campaigns and talent.
Remember that you must calculate the return on the investments you make.
Another tip that can undoubtedly improve the finances of your business, is that you start saving part of the income you have so that you save a certain amount for any unforeseen or future investment. Whether your business is going through a period of instability, lack of liquidity or acting in an accident, having savings will allow you to cover them without affecting your operation.
If in your business plans, is to open a new branch or develop new products, a loan can help you maintain the liquidity of your company. We recommend that you evaluate and choose the option that meets the needs of your projects. A loan can be a tool that helps you accelerate the growth of your business and improve your finances.
These are some indicators that you must take into account to improve and / or stabilize the finances of your business. Currently there are different tools that help you visualize the finances of your company, and so you can create strategies to strengthen your company.
At Kabusiness we have developed Compass, a totally free tool that will help you take control of your business finances. With Compass you can know your business information in one place.
Visualize the main expenses that your business has, who are the suppliers that you buy the most and who are your best customers. This will make it easier to create cost reduction strategies or customer retention campaigns.
In Compass you can see the credits you have, how much you are paying for them and receive tips to keep your score. In addition you can determine your ability to pay to avoid falling into debt over debt.
Now that you know some tips that can help you improve your business finances from the beginning of the year, start by implementing them to meet real and measurable objectives.