If you want to run a healthy business, there's one step that's absolutely a prerequisite - balancing the books. It's impossible to ensure success if you aren't measuring it clearly. This means knowing at all times not only how much money you have, but also what sort of cash flow you expect to move both into your business and out in the near future.
Having clear, accurate, up-to-date knowledge of your finances is absolutely worth it.
A lot of companies struggle in this area - often simply for lack of trying. When they don't take bookkeeping seriously enough, they start to lose their grip on their finances. They might be at serious risk for going under and not even know it.
At your business, you can do better. Having clear, accurate, up-to-date knowledge of your finances might require investing a bit of time and money, but it's absolutely worth it. Before you can be assured of business success, you have to know where you stand. Not knowing can lead to all sorts of trouble.
Balancing the books in all different ways
Keeping the books balanced for your organisation means staying on top of a few different aspects of your financial situation, according to the Victoria State Government. One key way of looking at money matters is gauging profit and loss - for each cycle, you have to have a good handle on how much money you're making or losing with each aspect of your business. That's the foundation for everything else.
Beyond that, measuring cash flow is also important. Having certain profits or losses promised to you is one thing, but actually moving the cash into your business and out is the logical extension of that, and it's obviously crucial - you can't invest in your company's future until you actually collect the money you're owed.
Finally, you also need to have a balance sheet that lists, at any given time, how much money you have in your accounts. Some companies simply calculate their balance at the end of a given month or financial year, but sometimes you need it more often than that to help with making tough money decisions.
Strong record-keeping is essential
For all of the above reasons, it's really difficult to run a successful business if you aren't paying enough attention to record-keeping. In fact, The Guardian recently emphasised that all companies, large and small, should probably be investing in keeping better records.
Good record-keeping is essential to your business.
If you keep copies of all receipts and invoices on file, it becomes easier to go back later and figure out gains and losses that you need to identify for tax purposes or for handling audits. It might be wise to devote full-time personnel to bookkeeping alone, as this can make it easier to manage your working capital and identify financial shortcomings that your company might need to address.
You can address discrepancies as they happen
So what happens if, in the course of balancing your books and assessing where your company stands financially, you find a shortcoming? What if you discover that your revenues, or perhaps your cash flow, are not sufficient enough to cover expenses? The answer may well be that debtor finance can help you cover any discrepancies you're dealing with.
If your cash flow this month won't be enough to keep your company afloat, debtor finance is a great temporary solution. You can get the dollars and cents you need to cover your needs, and you have our assurance that access to funding will be quick and secure. Talk to us today about how we can help with whatever you're going through.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].