In the current financial climate many companies are struggling, but burying your head in the sand and ignoring problems could mean the difference between liquidation or staying afloat. If you want to ensure your business is financially sound then look out for the following warning signs. If it all sounds frighteningly familiar to you, then it’s time to call in a bookkeeper to organise and protect your finances.
Warnings from the Bank
If you’re constantly in your overdraft, have cheques returned or find your bank contacting you about transactions or asking for lots of information from you, then alarm bells should be ringing. The best way to avoid this problem is to hire a bookkeeper to manage your cash flow so you don’t end up running short at the end of each month.
Reporting Warning Signs
Keeping up with reporting when you run a business can be a job in itself, especially when you’re just starting out. If you’ve failed to file your accounts at Companies House and been fined or if you’ve yet to file your annual return you could end up incurring serious costs. An accountant or bookkeeper can help take the pressure off and take control of your reporting to keep it up to date.
Warning Signs from Creditors
When your cash flow is out of control it can make it difficult to pay creditors on time. This can have a number of negative effects on your business such as not being able to get hold of the stock you need to fill orders and missing out on custom. Adversely you could find that you’re not being paid on time by your own clients, which means you don’t have the available funds to pay your own bills. There are lots of options for improving your business cash flow, such as employing the services of a factoring company that will lend you the value of your invoices and manage them for you in return for an interest fee when you pay them back. Hiring a bookkeeper to take control of your accounts will make your options much clearer so you’ll be in a better position to decide which course of financial action to take. Or you may find that after a little organisation you won’t need to take further action at all.
Finance Company Warning Signs
Many business owners employ the services of finance companies, for example they take out business loans or lease equipment from an asset finance company. Although some people are blessed with an intricate understanding of contracts, interest rates and other charges, for most of us it can be hard to be entirely sure what you’re paying for and whether or not those payments are set in stone. If you’re using a finance company and you’re not entirely clear about your payments, or the company is changing the payments and you don’t know why, a bookkeeper will be able to offer you help and advice about the terms of your contract and help you to find the best solutions if you’re struggling to pay.
Company Warning Signs
Whether you have 4 or 400 employees, when you’re running a company it’s important that the right people have the right information. This means it’s essential to understand your financial situation accurately. If the management team within your company don’t know what your gross profit is, what your costs are and how many sales you make each month then serious mistakes could be made that cost your company financially. It’s vital to keep proper records of all your financial dealings, carry out regular assessments and ensure that your team has access to all the information they need to keep your business running smoothly.
Lucy Pitt is a journalist and commentator who writes regularly on financial and bookkeeper services for small to medium businesses.