Controlling company accounts is not really easy. Deadlines, fines, revenues, expenses and a multitude of data that need to be accounted for when closing the balance of the month.
It turns out that because of lack of information, time and ability, many managers and entrepreneurs can’t execute efficient account control. The result, besides the disorganization, is the fall in profits and the difficulty in planning the future of the company.
The control of adequate accounts payable and receivable is fundamental to guarantee the financial health of your company, as well as optimize your time and your employees. With the correct numbers and up-to-date you can better assess the economic situation of your business, avoid fines, identify problems and find the best solutions. Don’t forget the trend! One example of a well-known company that wins business potential in the academic world intelligently is WritePro.
How to Control the Accounts of a Small Business?
The small business needs to understand that the first step to the smooth running and growth of the business is to structure its finances. But how to control the accounts, put nothing at risk and see your dream thrive?
There is no magic formula, but some points are crucial like planning, market knowledge, dedication, professionalism and more. Understand!
Low level of Business Management
Many entrepreneurs find problems early in their careers and end up getting complicated. Data show that on average 25% of companies close their doors with approximately two years of existence, aggravating even more when we think of five years, with index greater than 50%.
But why does this happen? The vast majority of cases are caused by financial problems, a research recently reported that almost 50% of US companies suffer from late payments, this shows the importance of controlling the accounts and if they plan financially.
To keep it simple, start with the basics:
Do a plan
The first step in organizing accounts is to make financial planning. In the plan, you must identify what the company’s expenses and revenues are. Spreadsheets are great for organizing planning! In relation to the accounts payable, it is important to inform in detail the nature of the account, the periodicity and the due date. Thus, you can evaluate the current situation of the business and project your future financial commitments. In this control must enter the fixed and variable expenses. With the passage of time you will be able to realize the average monthly expenses of your company.
Bills to pay:
– Record all company expenses – Including fixed expenses and a margin for variable accounts;
– Never mix personal accounts with business – Key step for any business to thrive and one of the main problems of business start.
Bills to receive:
– Record all sales and receivables with the deadlines – This is where you will know how much and when you will receive the payments, allowing you to take important steps so that nothing is delayed;
– Encourage prepayment – Important to ensure health of the venture, offer attractive conditions that make the client pay in advance;
– Have a good relationship with all clients – This relationship is fundamental to guarantee the payment, trust and growth of great partnerships;
– Know all the accounts that will be received – This will avoid disagreements and surprises that harm the company’s cash.
Pay bills on time
Another tip when it comes to controlling your bills is to deduct the cost amount within the correct timeframe. This means that it is very important that you pay your bills on time, avoiding delays that generate fines. Even because, the fines are great responsible for complicating the company’s billing. In addition, when paying on time you can get discounts. Negotiate with your suppliers and for sure you will get better values in products and services
Renegotiate debts
If you have not been able to pay the bills on time or you have acquired a debt that you can’t pay off, a good alternative is to try to renegotiate. The renegotiation serves even before the maturity of the debt expires. With proper planning you will know when you will have to pay for an account. If you have no prospect of being able to afford the commitment, try to renegotiate. This is a great way to combat fines and interest that erode your billing.
The steps above are very useful to keep your small business able to survive amid competition with many similar businesses. Hopefully this article is useful.
