If your company reaches the end of the month without financial breath and you need to make tiring calls to the bank manager in search of credit, it must be in serious trouble, and the worldwide economic crisis may not be the cause!
You may have a great product or service and have market demand, however, decreased revenue, delayed payments to suppliers and overdue tax schedule are a signal that it is time to stop and reevaluate the business, before it is too late!
In order to not be part of the alarming number of companies that shut down their activities due to inefficient financial management, information and technology are needed. Find out here the main mistakes that can lead your business to zero profit. It is possible to reverse the scenario and get back in the black!
Not separating company and personal assets
It is undoubtedly one of the most common mistakes. The finances of both parties should be separated, without exceptions! The money of the legal entity should be used as working capital to pay bills, salaries, investments etc.
The money destined to the individual person should respect the financial and administrative planning, and follow rules so that it does not affect the cash flow and make your financial management inefficient.
Not having cost control
If the company’s figures are not known, this will lead to a chain reaction. It is from an efficient cost management that the company will remain competitive and be able to define profitability. An inefficient financial management does not prioritize the collection and recording of information, whether large investments or small daily expenses.
The efficient control of the cash flow will show in real time the financial health of the company and allow the manager to better analyze the resources. Investing in management software is recommended to bring reliability and dynamism to the process.
Not having financial planning
One of the big mistakes of inefficient financial management is the lack of planning. If you do not have clear goals and expenses for all the company’s departments, you may have problems and, at best, you will not get anywhere, and at worst, you may close down the business! Here are some basic steps for a good annual planning:
- make a survey of the current situation;
- set global goals for the company;
- create an action plan;
- draw up an annual budget;
- make a prediction of potential economic scenarios.
Not automating management processes
Nowadays, it is virtually impossible to survive without an efficient data flow. The – well advised – use of technology provides a broad view of the business, reducing costs and making it competitive and dynamic. This service is available for all types and sizes of companies, and not using it could be the shortest route to ruin!
Even if your business is currently trapped in a net of inefficient financial management, you can reverse it with a little thought, will and technology. The good news is that the solution is viable and affordable!
Find out how IoT – or Internet of Things, as it is better known – can help you in this endeavor, providing important innovations for the financial sector!