Five Tips to Keep Your Business Financially Healthy
Proper financial planning and decision-making are some of the factors tied to keeping your business finances in healthy shape. However, when you are your own boss, running and growing your business can be a taxing job as you need to play a role in sales, marketing, payroll, and everything else in between. In such situations, you need to find a solid financial plan so that your company can stay on top of money management.
At Morley Accounting Services, we understand that keeping your finances healthy and ensuring that your business thrives, can be challenging. To help you with a smart financial plan, we have listed five tips to keep your business financially healthy.
Tip #1: Maintain some cash reserves
With the uncertain business climate, we are experiencing, holding cash reserves is vital to managing your business’s ongoing health. Such cash reserves will help in payments of unexpected expenses or maintaining the business when revenues dip unexpectedly.
Tip #2: Keep on top of your credit score
Banks and other lenders are depending heavily on financial software to determine if you and your business are creditworthy and if your credit score is impeccable. To stay on top of this credit situation, always pay at least the minimum payment required on your credit cards on time. For example, use only 30% of the credit limit on any credit card. If you need $9000, get a credit limit of $27000 or get three cards with a credit limit of $9000 and use $3000 on each.
Tip #3: Increase your prices more often
Prices of inputs on materials and labor are increasing rapidly. For instance, lumber’s price has quadrupled over this summer, and the new effective “minimum wage” has risen to $20 per hour. If you do the math on the new EI (Employment Insurance) rules, you’ll discover that a person is better off on EI with a part-time job than taking a full-time job for less than $20/hour.
Tip #4: Have accounts with more than one bank
The banks each have different lending rules and rates, and from time to time, each bank changes those rules. So you may find that one bank will not give you credit this year whereas another bank will. The same goes for having multiple credit cards for emergencies.
Tip #5: Innovate and automate
There are so many efficiencies found in automating. It makes sense to explore the options that are best for your business. You could switch to QuickBooks Online and syncing the apps you use. Use a time and scheduling software like T-Sheets to track employee time and location throughout the day and allow remote employees to upload their expenses for payment to an expense tracking software such as Expensify.
For more tips on how to keep your business healthy and organized, reach out to Morley Accounting Services. As one of the leading accounting firms in Gravenhurst and Barrie, ON, we assist with your business’s growth and profitability through our professional service so that your business stays compliant and you gain personal freedom. Our accounting services include business decision maps, business future-safe programs, business master control panel, business tax minimizer, and business pricing model.