To keep up with the current times, you need to be financially smart. It doesn’t matter how old you are, how big or small your company is or how much you know about finance — to remain afloat, you need to know these simple hacks.
Set financial goals and track them every quarter
There are different financial goals that you can set to make sure you’re remaining afloat. The main goals are: profitability, cash flow and business expansion.
- Profitability: earning more revenue than you spend on operations
- Cash flow: keep emergencies in mind and make sure you’re not only covering this month’s expenses, but months ahead. This Covid incident was the greatest example and lesson learnt when it comes to emergency cash flow and a funding plan to cover expenses.
- Business expansion: This is something your business needs to constantly think about. You need to always keep a certain amount to be able to create successful campaigns and improve your business.
Always track your spending
- Use online invoicing and budgeting tools. For more invoicing tools
Some helpful tools here.
- Use excel sheets and masterlists to track yearly projects and revenue so you can predict next year’s cash flow.
- Use a specific method of payment and stick to it.
Focus on your customers and clients
Without listening to your customers and clients, you have no business. Always find ways to gain more clients and customers. Once you’ve gained more customers, you will have enough cash fluidity to get more employees and expand your business. It’s an ongoing cycle.
“If you have a chronic late-paying customer, which we all do, instead of badgering them with repeated invoicing and phone calls, try a different approach. Change the payment terms to ‘2/10 Net 30.’ This means if the customer pays the invoice within 10 days, they receive a 2 percent discount off the total bill. If not, the terms are full payment due in 30 days.”– James Stefurak, managing editor ofInvoice Factoring Guide.