Budding entrepreneurs are often attracted to places that offer them better infrastructure, entrepreneurial connections, and resources. Networking events, investor meetups, and demo days provide opportunities to find good advice and investment opportunities. Finding solid connections is one of the initial aims of any entrepreneur, and these valuable connections help them slowly integrate into the ecosystem of the corporate world.
Hub Culture
The idea of start-up hubs is one thing that reduces the worries of an entrepreneur by a bit. Here, you can find all sorts of resources in one place – from necessary connections to valuable information. There are a variety of hubs available depending upon the region you are willing to operate in. There are multiple start-up communities. You may also be able to find a virtual start-up hub.
However, a choice comes in deciding which hub will yield better results here. Virtual hubs are convenient and can be accessed by an entrepreneur from an area that does not have many entrepreneurial resources. However, brick-and-mortar hubs allow entrepreneurs to meet mentors and investors in person, better grasp information, and present their ideas. It is better to meet your investors in person; this will help you build stronger relationships.
Virtual vs. Brick and Mortar
The basic idea of both kinds of hubs is the same. However, there are apparent differences between the two. The number of goals you have already set and the guidance you require can be significant factors in choosing between the two. Suppose you are clear with your business plan and have specific requirements (for example, requiring a professional for accounting tasks such as bookkeeping). In that case, you may be able to go to an online or virtual hub to get a contract that will help you in fulfilling that requirement. However, if an entrepreneur needs more guidance, going to a brick-and-mortar hub is recommended to grasp information from experienced entrepreneurs quickly.
The two main reasons for entrepreneurs to opt for a virtual hub are:
Obstacles like geographic location hinder access to a brick-and-mortar hub.
The entrepreneur has a late-stage, well-settled start-up and seeks contacts to help start operations or growth.
A brick-and-mortar hub has its benefits. Interacting with investors and mentors in person can achieve a lot. Moreover, a physical hub allows the entrepreneur to join a community. Sharing knowledge can help grasp a better understanding of the entrepreneurial world.
Both types of hubs have the same aim, which is to help budding entrepreneurs. Many entrepreneurs believe the kind of hub they choose does not make a difference. Most believe their location is the only significant factor in determining the two. Most entrepreneurs say they would prefer to go to a physical hub in a big city with a lot of resources. Meanwhile, if they are in a remote location far from a big city, a virtual hub would be where they can access the resources they need.
Some entrepreneurs emphasize that both kinds of hubs have a different impact concerning the start-up’s geographical location. Meanwhile, other entrepreneurs believe both types of hubs are essential and that utilizing both is necessary for success in different start-up stages. They also believe that to build a solid company; the entrepreneur must attend a brick-and-mortar hub for guidance and mentorship while using virtual services for contacts necessary to achieve goals. Now, you can decide on virtual vs. brick-and-mortar for your start-up needs.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
One of the most crucial tasks in the manufacturing industry is determining per-unit cost. It requires professional handling and technical accounting knowledge. Calculating the costs of materials, labor, and overhead expenses involved in manufacturing a specific product is a challenging task that demands the utmost brilliance and perfection. To determine the total cost incurred in producing a good, you must carefully evaluate the production process at different stages. Work In Process (WIP) is commonly used in production and supply chain management and holds immense significance in the manufacturing and distribution industry.
What is Work in Process?
When analyzing the production process, tracking all costs associated with goods that are still in production is essential. This includes raw materials, labor, and overhead costs. At each production stage, it is crucial to document all expenses carefully. This information helps determine the exact unit cost of the goods being produced. Accurate bookkeeping is vital as it ensures all costs are accounted for, and the final price reflects total expenses.
As far as the calculations are concerned, the formula for calculating work in process is:
Work in process = (operating inventory goods in process + raw material used during the period + direct labor during the period + factory overhead for the period) – ending inventory.
WIP–in light of Automation and Technology
We are fortunate to live in an era of revolutionary accounting and bookkeeping practices. The advent of state-of-the-art automation and technology has made these procedures more accessible and efficient. Thanks to cutting-edge accounting software and solutions, complex calculations take mere seconds, are astonishingly precise, and are far simpler to oversee. It’s truly mind-blowing!
Great news! Thanks to modern accounting and manufacturing software, calculating work in process is now a breeze. With these tools at our disposal, we can easily manage and control the manufacturing process. Plus, we have access to expert accounting and bookkeeping professionals who can lend their expertise at various stages of production, helping to reduce costs and further streamline the process. The future of manufacturing is looking bright!
Benefits of Reducing Manufacturing Work in Process
Good news! There are many benefits to reducing manufacturing work-in-process costs, such as improved cash flows, higher liquidity, and decreased business risks. But don’t worry; achieving these benefits is entirely doable with a well-executed strategy. We know that every manufacturing establishment wants to minimize costs, so it’s essential to integrate innovative procedures and techniques to eliminate bottlenecks. Although it might seem daunting to calculate work-in-process costs initially, breaking down each cost piece by piece can make it much more manageable. With a positive attitude and thoughtful approach, you can easily streamline your manufacturing process and reap the rewards.
Strategic Forecasting and Planning: The Need for Calculating Work in Process
Planning for the future and making informed decisions are essential for any business to succeed. It’s crucial to involve yourself in reducing per-unit costs to save more money at the end of the day. It’s essential to clearly understand your production requirements and specifications To determine the number of units that should be produced, raw material costs, labor costs, and overhead costs. Strategic thinking involves having a realistic vision, mission, and out-of-the-box approach to make future projections related to manufacturing and production.
Moreover, strategic planning and analyses will define where your company is heading and what the company aims to achieve in both short and long-term periods. Machines can be added or integrated into the manufacturing process, and the workforce can be educated with newer and advanced techniques for optimal utilization of resources to attain ideal results. Calculating work in the process must be handled carefully because it directly influences your profitability index.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Partnering with outsourced services to acquire the highest quality planning and strategy for a fraction of the cost is pivotal to success. Small or big businesses no longer prefer hiring in-house teams to manage specific tasks that can be outsourced to third-party service providers. The reason is apparent: they desire to seek specialized expertise from the gems of the industry. Moreover, start-ups and small businesses usually have scarce resources: time, labor, and money, which restricts them from hiring in-house accounting and bookkeeping professionals. It is safe to say that time and cost-effectiveness are the major driving forces behind the motivation to hire business accounting and bookkeeping consultancy services for start-ups in today’s time.
The Evolving Needs of Start-ups and Small Businesses
From small businesses to large companies, every business establishment needs someone to manage their financial accounts, pay bills, send invoices, reconcile bank statements, and manage debtors promptly and effectively. Maintaining separate finance departments to tackle financial matters is a hassle and a considerable expense. That is why most businesses outsource their economic issues. Looking at the bigger picture, most start-ups lack the wisdom to tackle complex bookkeeping and accounting-related matters, which means they cannot manage to look after their books and finances on their own. For them, hiring the professional expertise of an accountant and bookkeeper is more of a need than a desire.
Business Accounting Consultancy Services for Start-ups
Many success stories directly result from hard work, toiling, commitment, and sincerity that guarantee a secure future. An experienced and qualified accountant or bookkeeper can serve the suitable needs of a business with creative wisdom like no other, all the while making better financial decisions.
Beating your competitors with numbers is quite different, so you must employ the right accounting tools and strategies to get ahead of others. Business accounting and bookkeeping consultancy services are the need of the hour as they provide you with valuable insights to help you improve your business’s financial health.
Whether you are starting a new business venture or acquiring an established business, the need for professional accountants and bookkeepers never dies. Many start-ups or established businesses used to feel reluctant to hire professional accounting or bookkeeping services for fear that the integrity of vital data highly prioritized by the company would be compromised, for example. Other concerns would be qualification or experience dilemmas that a client is unsatisfied with.
What do Business Accounting Consultancy Services do on Your Behalf?
Most start-ups lack ideal cash management skills, so they fail to make their mark and successfully manage their business operations. This kicks them out of the competitive race, which creates room and gives others a chance to capitalize on the vacant space. Therefore, businesses try to fill this vacuum and acquire the services of professional accounting consultants to help them understand various financial aspects for better decision-making.
Accounting and bookkeeping professionals can help you in many of the following ways:
Financial forecasting and planning
Analyze financial statements on your behalf and recommend ways to overcome cash flow issues.
Determine the profitability of your business.
Monitor the influx and outflow of cash and help you achieve the right strategic fit.
Expand your business with critical financial insights and knowledge.
Save a lot of time and money and help you focus on the core of the business.
Tax reductions, debt repayments, and more
Putting the Right Business Accounting Consultancy Services and Practices in Place
Accounting and bookkeeping professionals certainly have a better understanding and knowledge than most. They know the tricks of the trade and are masters of the game, as they can solely change the entire fate of a company with better financial decision-making. When you task them with authority, they are expected to live up to expectations and carry out their duties in the best possible way to the best of their abilities.
Thus, if you expect to grow your business in a competitive business environment, you must have the best possible business accounting and bookkeeping consultancy services and practices to equip and enable your business for success.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
For many years, people have asked this question? Choosing an independent dealer or a mechanic is tough for people because of the pros and cons associated with both. We hesitate to take a side as we find benefits in both. Whether you consider the professionalism of your dealership or have taken your vehicle to a local mechanic for years, you have a level of gratitude and satisfaction associated with both that makes you consider their service.
What exactly each of them has to offer us? Before making your next big decision in car repair, look at the pros and cons of each.
Dealer vs. Mechanic – The Difference
At first glance, the difference between a dealer and a mechanic looks purely financial. Those with newly purchased cars will consider the perks offered by their dealership. On the other hand, car owners also jump from mechanic to mechanic to find a trusted and reliable service.
However, there is more to all this than it seems.
Dealers have the expertise for a specific brand; for example, they specialize in BMW or Ford. They provide warranties backed by the manufacturers and utilize high-quality parts straight from the company. The mechanics at a dealership have the training and expertise to handle current issues in the specific brand.
Independent mechanics, on the other, provide personalized services. These mechanics offer scheduled maintenance, customer service, and better pricing. Unlike a dealership, you can establish a relationship with a mechanic and communicate with them for better rapport. Building a relationship with a mechanic goes in your favor, as customers who visit local mechanics have a better experience and can go for discounted pricing.
Benefits of Dealership
Dealerships provide a trained staff of mechanics and technicians specializing in a specific brand. They work on hundreds of vehicles every month, so there is no shortage of expertise with a dealership. Besides quick and efficient service, they also use high-quality parts specific to the make and model of your vehicle. Dealers also have the authority to inspect the car using the manufacturer’s methods, so you can rest assured that your vehicle is in the right hands.
Most modern vehicles require diagnostic equipment that only dealers possess. It is more beneficial to visit a dealership to handle the issues rather than pay a mechanic to understand. Whether your car has a complex mechanical or recurring electrical problem, a dealership has the resources and expertise to keep it updated and restored.
Ultimately, you have an advantage in the dealership if you possess a manufacturer’s warranty. Think of it as health insurance, where your warranty covers the repairs if it remains active. After it expires, you can either extend it or pay for the needed repairs.
Benefits of an Independent Mechanic
Although they are just smaller than dealerships, independent mechanics have skills equal to dealers in terms of services and repair. They usually staff former technicians working with dealerships, so they have diverse expertise. Unlike a dealership, customers can directly contact a mechanic and discuss the details of their repairs. Additionally, mechanics have expertise in various brands and can handle issues of almost every vehicle. They have a specialty in multiple brands due to their diverse experience and, in some cases, also provide a third-party warranty.
Nurturing a relationship with a mechanic is also advantageous for better pricing. Most people trust the skills of a mechanic to delve deep into an issue and mitigate it accordingly. Mechanics usually rank higher in terms of price, quality, and customer satisfaction.
Disadvantages of Dealers
Dealers excel in prestige and expertise but not in pricing.
They have time constraints because of factory-made equipment. If stock is unavailable, dealers must ship that item and make repairs. It usually takes more time to complete and further inflates prices.
You cannot interact with or contact your dealer mechanic as they have a pool of technicians. There are difficulties in establishing relationships with dealers.
Disadvantages of Mechanics
Honesty and reliability are the main factors when finding the right mechanic.
Mechanics use both local and factory-made parts for repairs. If you go for factory parts, you must pay for them and wait for shipping time.
Finding the right mechanic with trustworthy services is rather tricky if you live in a large city.
Which is Better?
In the end, the type of car repair service depends on your needs and preferences. If you consider pricing, an independent mechanic is a better option. On the other hand, if you prefer quality and durability, then choose a dealership. Consider their pros and cons before approaching a service for your car repairs.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
One of the most efficient ways to advertise your company is through digital marketing. However, doing so without a solid strategy isn’t enough to ensure success.
What matters most is that you can use it successfully to achieve your conversion goals. It might be to increase social media followers, grow your email list, increase sales, or whatever your conversion objective is.
Your marketing efforts will be a waste of time until you do this. After all, you’re running these ads to increase conversions, leading to more profitable income for your company.
You may see the results occasionally, but it might aggravate you to realize how slow your conversion rates are. So, here are some proven methods for improving the effectiveness of your digital marketing initiatives.
Use Powerful Pop-ups
Many individuals find pop-ups annoying, especially those that are flamboyant and invasive.
On the other hand, pop-ups continue to operate and produce excellent results. The challenge is to create them to look realistic enough to elicit a response from visitors.
Context is the most crucial consideration when creating unique pop-ups. Make sure your pop-ups have a purpose if you want them to be successful. Otherwise, they might distract users, causing them to leave your site.
Pop-ups can have a variety of objectives. The purpose might be to create leads, collect feedback, increase revenue, or something else. Selecting the correct pop-up for your website, regardless of your conversion objective, is critical. You may significantly increase your conversion rates by doing so.
Your pop-up will only be successful if it provides value to your target audience. People will disregard them if they do not do so.
Create Urgency
Create urgency on your website with the following practical digital marketing approach. You may create FOMO (fear of missing out) among your audience by doing so. Most individuals experience FOMO, a psychological phenomenon brought on by the realization that others participate in something you aren’t. Many individuals feel compelled to grasp an opportunity before it passes them by.
“Limited offer,” “last chance,” “act now,” and similar phrases convey a sense of urgency. When visitors encounter such terms, they are more likely to respond since it motivates them to act.
So, if you’re having a sale, it’s a good idea to highlight how many things are still available (e.g., “last five left”). As a result, your audience will feel compelled to act quickly to take advantage of the bargain before it runs out.
However, it’s vital to remember that this strategy works best if your product or service is valued, helpful, or essential.
Design a Killer CTA
The most crucial aspect of your marketing approach is our call to action (CTA). A call to action (CTA) is a term or phrase meant to urge users to do a specific action, usually in the form of a button.
By employing the correct CTA, you can quickly encourage your users to respond to your conversion goal. If you don’t include them, your users will become confused and irritated since they won’t know what to do next.
A call to action (CTA) means to direct your users to the next step in getting what you’re giving. However, it’s vital to note that not all CTAs can convert. Consequently, ensure you understand how to create them for more significant results.
Action words are always in the finest CTAs. It informs your users about the same action they should take. Aside from that, the button’s design is essential. To make your button stand out, you must use white space efficiently. Use a color contrasting with the rest of the site to make the button stand out.
Additionally, ensure that your button is mobile-friendly. Please don’t overdo it with the scale. Make it just big enough to be seen and clicked on.
Have a Solid Social Media Presence
Social media marketing plays a vital role in the success of your digital meeting strategy. You get noticed more frequently when you have a robust social media presence. It will develop your audience’s understanding of the brand.
More understanding means more and better brand recognition, which will increase brand integrity again. When people trust you, they don’t mind buying from you. So, a solid social presence is highly significant for an efficient marketing campaign.
Bottom Line
Digital marketing is slowly taking the place of traditional marketing slowly and gradually. Through digital marketing, You will be aware of the global industry business, and from a long distance, every company can lead a sales conversion through digital marketing.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Starting your own business can be a frightening but rewarding procedure. While an ideal business plan condemns entrepreneurs, financing is one of the most significant elements a company needs to succeed. However, financing a small business can be a drawn-out process, especially for those with an accounting background.
Consistent improvements to grow your small business are daunting for its success and sustainability. Meanwhile, the operations like monitoring cash flow, controlling the marketing, and identifying your strengths are the most profitable.
Here’s a list of 10 strategies to utilize the acquired funds smartly to develop your small business.
Enhance the product packaging
The first thing you can apply to utilize the funds in a productive chore is the packaging. Bringing innovation to the product and services will attract the clients and commit the old ones. Investment in better quality and paging of the product will help you meet your client’s requirements, and they will come back to shop from you.
Options for impactful Marketing
Wasting money on profitless marketing is easy. Seek out budget-friendly and impactful marketing strategies to grow your business. Experiment with a few of the latest tactics and examine their after-effects on your business. Social media is one of the great ways to market your company globally.
Sharpen your monetary skills
A big-win area for business growth is the sales function. Whether you’re a sole operator or managing a sales team, you’ll have to focus on sales improvements. Even the trends that don’t seem relevant on the outside might have a versatile impact on the inside. Consider all the possibilities.
Modernize technology
Investing in the latest technology provides you with pedantic insights into the clients and potential prospects. You can get CRM (customer relationship management) software to maintain the sales records virtually. With this software, you won’t be carrying the burden of keeping the records manually; instead, you’ll get all the documents prepared beforehand.
Get the latest inventory
Another great way to utilize the funds efficiently is to get the latest and fresh inventory and equipment. This way, the work procedure will improve, and the customer’s orders will be completed on time.
Instead of purchasing used machinery, get the latest machinery with advanced features to boost your business.
Clear the debts
Utilize your funding to clear the account payables. The higher interest rate comes with a higher debt amount, which you probably wouldn’t want to pay all at once. Also, it can utilize the rescued amount of cash from the interest rate to fulfill other company financial requirements.
Know your boundaries
Successful entrepreneurs have a clear idea of their boundaries. By identifying your entrepreneurial personality type, you operate your resources well and find the areas of weakness. For instance, if you excel at sales marketing but have less experience with the accounts, focus on the sales and hire a professional accountant to handle the books.
Host business events
Hosting business events as an entrepreneur with a small business is a great way to create an identity among the potential audience. Invest in advertising and promotional banners so everyone knows about your company’s existence.
Consider a niche market
A niche is a specialized portion of the market for a particular product or service. When other companies fail to fulfill the customers’ requirements, focus on the potential areas and invest to win the audience’s trust.
Art of franchising
Franchising provides a rapid boost to your small business. In this activity, the product is distributed among the potential audience. However, before franchising, you must do a market analysis to know the customer’s requirements and demands.
The above-defined strategies come in handy for small enterprises at every stage of business. Running a small business is quite challenging as the owner is responsible for many monetary chores. However, there are numerous options out there for the utilization of new funds. Determine your financial position and make a productive decision for the growth of your business.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Master Financial Management: A Key to Entrepreneurial Success
Financial management for entrepreneurs involves systematically planning, organizing, controlling, and monitoring financial resources to achieve business objectives while maintaining personal financial security. This comprehensive approach encompasses cash flow optimization, strategic budgeting, investment planning, risk mitigation, and establishing robust financial systems that support both immediate operational needs and long-term growth aspirations.
Having guided hundreds of small and medium enterprises through their financial journeys over the past two decades at Complete Controller, I’ve witnessed firsthand how proper financial management separates thriving businesses from those that struggle. Did you know that 82% of small businesses fail due to poor cash flow management[17]? Yet most entrepreneurs spend less than 10% of their time on financial planning. In this comprehensive guide, I’ll share the proven strategies, systems, and insights that have helped my clients build financially robust enterprises that generate sustainable wealth through strategic financial planning for startups, effective cash flow management for entrepreneurs, and smart investment strategies.
What is financial management for entrepreneurs and why does it matter?
Financial management for entrepreneurs is the strategic oversight of all monetary aspects of business and personal finances to maximize growth and minimize risk
It involves creating integrated systems for budgeting, cash flow forecasting, expense control, and investment allocation that work together seamlessly
Successful entrepreneurs separate business and personal finances while maintaining strategic alignment between both financial ecosystems
Effective financial management provides real-time visibility into business performance through key metrics and reporting systems
It establishes the foundation for scaling operations, securing funding, and building long-term wealth beyond the business itself
Building Your Financial Foundation: Systems and Separation
Establishing a solid financial foundation requires creating completely separate financial ecosystems for business and personal lives while maintaining strategic coordination between them. This separation provides legal protection, simplifies tax compliance, and creates clear visibility into both business performance and personal wealth building. The foundation starts with establishing dedicated business banking relationships, credit lines, and accounting systems that operate independently from personal finances.
Modern cloud-based financial management platforms have revolutionized how entrepreneurs track, analyze, and optimize their finances in real-time. These systems automatically categorize transactions, sync with bank feeds, and provide dashboards that transform raw financial data into actionable insights. The global financial management software market demonstrates this growing importance, expanding from $17.746 billion in 2021 to a projected $48.514 billion by 2033[4].
Essential financial systems every entrepreneur needs
Creating robust financial systems involves implementing integrated tools for bookkeeping, invoicing, expense management, and financial reporting. The most effective entrepreneurs use platforms that combine artificial intelligence with human oversight for accuracy while saving time. These systems should automatically generate the three core financial statements—profit and loss, balance sheet, and cash flow statement—that provide a complete picture of business health.
Beyond software, entrepreneurs need established processes for monthly financial reviews, quarterly planning sessions, and annual strategic assessments. Only 54% of small business owners had a good understanding of financial management before starting their business, and 42% admit they had limited or no financial literacy before launching[18]. This systematic approach transforms financial management from an administrative burden into a strategic advantage.
Strategic Cash Flow Management for Entrepreneurs
Cash flow management represents the heartbeat of any successful business, yet it’s where most entrepreneurs struggle most significantly. Unlike traditional employees who receive predictable paychecks, entrepreneurs must navigate irregular income patterns while maintaining consistent operational expenses. The key lies in developing sophisticated forecasting models that anticipate both seasonal fluctuations and growth-related cash needs.
Effective cash flow management begins with understanding the difference between profit and cash flow. A business can be profitable on paper while struggling with cash shortages, which explains why profitable companies sometimes fail. Smart entrepreneurs implement automated systems that track cash flow in real-time, providing early warning signals when cash positions might become challenging.
Advanced cash flow optimization techniques
The most sophisticated entrepreneurs use a combination of accounts receivable management, strategic payment timing, and cash flow forecasting to maintain optimal liquidity. This involves negotiating favorable payment terms with suppliers while implementing efficient collection processes with customers. Automated invoicing systems with built-in payment reminders can significantly improve collection times and reduce bad debt risk.
Case Study: LeQuitha Simmons, registered nurse and CEO of nurse staffing agency Nurses at Heart, faced a critical cash flow crisis during the pandemic when one healthcare facility was 6-8 months late on payments. Despite increased demand for nursing staff, she couldn’t hire additional nurses or take on new contracts due to cash being tied up in unpaid invoices. By implementing invoice factoring through FundThrough’s platform, which integrated with her QuickBooks system, she unlocked immediate cash flow from outstanding invoices. This solution required minimal administrative work and allowed her to scale operations during the healthcare staffing shortage[8].
Emergency cash reserves represent another critical component, with successful entrepreneurs maintaining 3-6 months of operating expenses in readily accessible accounts. This safety net provides flexibility during unexpected downturns and enables quick action on growth opportunities without requiring external financing.
Budgeting Tips for Small Business Success
Traditional budgeting approaches often fail entrepreneurs because they’re designed for predictable corporate environments rather than dynamic startup ecosystems. Successful entrepreneurs implement flexible budgeting systems that accommodate rapid growth while maintaining cost control. This involves creating both conservative baseline budgets and optimistic growth scenarios, then managing expenses according to actual performance.
The most effective budgeting approach for entrepreneurs involves zero-based budgeting principles, where every expense must be justified based on its contribution to business objectives. This method prevents budget creep while allocating resources to the highest-impact activities. Regular budget reviews—monthly rather than quarterly—enable rapid adjustments as market conditions change.
Dynamic resource allocation strategies
Smart entrepreneurs allocate resources based on measurable return on investment rather than traditional budget categories. This might mean shifting marketing spend from underperforming channels to high-converting activities within the same budget period. The key is maintaining detailed tracking of results so that resource allocation decisions are data-driven.
Variable cost management becomes particularly important during scaling phases, when expenses can grow faster than revenues without proper controls. Implementing approval processes for non-essential expenses while maintaining flexibility for growth investments requires sophisticated financial judgment that develops over time.
Investment Strategies for Entrepreneurs
Entrepreneurial investment strategy extends beyond reinvesting profits back into the business. The most financially successful entrepreneurs develop diversified investment portfolios that reduce risk while building wealth outside their primary business. This approach provides financial security even if the business faces challenges and creates multiple income streams that support long-term financial independence.
Entrepreneurs face the challenge of balancing business growth investment needs with personal wealth-building objectives. During high-growth phases, reinvesting every dollar back into the business concentrates all financial risk in a single asset. Smart entrepreneurs establish systematic profit allocation systems that automatically distribute earnings between business reinvestment, personal compensation, taxes, and external investments.
Tax-advantaged wealth-building vehicles
Entrepreneurs have access to significantly more tax-advantaged investment options than traditional employees. SEP IRAs, Solo 401(k)s, and defined benefit plans allow business owners to contribute substantially more to retirement accounts while reducing current tax obligations. These vehicles can accommodate contributions of $69,000 or more annually, compared to the $7,000 limit for traditional IRA contributions.
Beyond retirement accounts, entrepreneurs can leverage business structures to optimize investment taxation. Real estate investments, equipment purchases with depreciation benefits, and strategic business acquisitions can all provide tax advantages while building wealth. Working with tax professionals who understand entrepreneurial finance strategies rather than basic individual tax planning maximizes these opportunities.
How to Manage Business Expenses Effectively
Expense management for entrepreneurs requires a more sophisticated approach than simply cutting costs. The most successful business owners focus on expense optimization—every dollar spent generates measurable returns while maintaining operational efficiency. This involves implementing systems that automatically categorize expenses, track return on investment, and identify opportunities for cost savings without compromising growth.
Modern expense management goes beyond traditional bookkeeping to include predictive analytics that identify spending patterns and flag unusual activities. Automated expense reporting systems integrate with credit cards and bank accounts to provide real-time visibility into spending across all business activities. This level of visibility enables proactive management rather than reactive cost-cutting.
Strategic expense optimization framework
The most effective entrepreneurs implement expense review processes that evaluate spending based on strategic contribution rather than absolute dollar amounts. A $10,000 marketing expense that generates $50,000 in revenue represents better value than a $1,000 expense that produces no measurable results. This framework requires establishing clear metrics for measuring expense effectiveness and conducting regular reviews to optimize spending allocation.
Vendor relationship management becomes particularly important as businesses scale. Negotiating payment terms, volume discounts, and service level agreements can significantly impact both cash flow and expense management. Smart entrepreneurs view vendor relationships as strategic partnerships rather than transactional arrangements.
Best Financial Software for Entrepreneurs
The financial software landscape has evolved dramatically, with cloud-based platforms offering sophisticated features previously available only to large corporations. Modern financial management platforms combine bookkeeping, invoicing, expense tracking, and financial reporting in integrated systems providing real-time business insights. The U.S. accounting software market has grown to $6.09 billion in 2024, projected to reach $7.7 billion by 2030[9].
The key to selecting appropriate financial software lies in understanding your specific business model and growth trajectory. Service-based businesses have different needs than product-based companies, and rapidly scaling startups require more sophisticated forecasting capabilities than stable, mature businesses. The most effective platforms grow with the business, offering basic functionality for startups with advanced features available as needs become more complex.
Integrated financial management platforms
Leading financial management platforms now incorporate artificial intelligence and machine learning to automate routine tasks while providing predictive insights. These systems automatically categorize expenses, detect anomalies, and generate forecasts based on historical data and market trends. The combination of automation and human oversight creates more accurate financial information while reducing administrative overhead.
Integration capabilities represent another critical factor, as entrepreneurs typically use multiple business systems that need to share financial data. The best platforms integrate seamlessly with e-commerce systems, customer relationship management software, and banking institutions to create comprehensive financial visibility without manual data entry.
Effective Financial Decision Making for Startups
Financial decision-making for startups requires balancing aggressive growth objectives with prudent risk management. Unlike established businesses with predictable cash flows, startups must make investment decisions with limited financial history and uncertain market conditions. The most successful entrepreneurs develop decision-making frameworks that consider both quantitative metrics and qualitative factors.
Effective startup financial decision-making begins with establishing clear metrics for measuring success and return on investment. These metrics should align with both short-term operational needs and long-term strategic objectives. Regular monitoring and review processes allow decisions to be adjusted as market conditions change and more data becomes available.
Risk-adjusted decision framework
Smart entrepreneurs implement risk-adjusted decision-making processes that consider both potential returns and downside scenarios. This involves modeling various outcomes and establishing contingency plans for different scenarios. The goal is not avoiding all risk—which is impossible in entrepreneurship—but taking calculated risks that align with the business’s risk tolerance and growth objectives.
Case Study: Sam, founder of Testimonial Hero, exemplifies effective financial decision-making under uncertainty. When his company’s finance and accounting costs became overwhelming, he partnered with Fuelfinance to implement systematic financial management processes. Through weekly financial reviews, clear KPI tracking, and automated reporting systems, Sam reduced financial management costs by 50% while improving decision-making confidence. This systematic approach enabled him to focus on growth while maintaining financial control during scaling phases[7].
Final Thoughts
Mastering financial management as an entrepreneur isn’t just about keeping accurate books or maintaining positive cash flow—it’s about creating integrated systems that support both immediate operational needs and long-term wealth-building objectives. Throughout my years helping entrepreneurs navigate financial challenges, I’ve consistently observed that those who invest time in building robust financial management capabilities significantly outperform their peers in both business growth and personal wealth accumulation.
The strategies outlined in this guide—from establishing separate financial ecosystems to implementing sophisticated cash flow forecasting—represent proven approaches that successful entrepreneurs use to build financially resilient businesses. Financial management is a skill that improves with practice and systematic implementation. Start with the foundations, implement systems gradually, and continuously refine your approach as your business grows and evolves. If you’re ready to transform your financial management capabilities and build the systems that support sustainable business growth, visit Complete Controller to discover how our expertise can accelerate your financial success journey.
Frequently Asked Questions About Financial Management for Entrepreneurs
What is the most important financial skill for entrepreneurs?
Cash flow management represents the most critical financial skill for entrepreneurs. Understanding how to forecast, monitor, and optimize cash flow prevents the liquidity crises that cause 82% of business failures, even among profitable companies.
How should entrepreneurs separate business and personal finances?
Entrepreneurs should establish completely separate banking relationships, credit accounts, and accounting systems for business and personal use. This separation provides legal protection, simplifies tax compliance, and creates clear visibility into both business performance and personal wealth building.
What financial software is best for small businesses?
The best financial software depends on your business model and size. Cloud-based platforms like QuickBooks, FreshBooks, and Fuelfinance offer comprehensive features for most entrepreneurs, with the key being integration capabilities and scalability as your business grows.
How much should entrepreneurs pay themselves?
Entrepreneurs should establish systematic compensation that covers personal living expenses while maintaining adequate business cash flow for growth and emergencies. The specific amount depends on business profitability, growth stage, and personal financial obligations.
When should entrepreneurs hire financial professionals?
Entrepreneurs should consider professional financial help when business complexity exceeds their expertise, during rapid growth phases, or when tax strategies could significantly impact overall financial outcomes. Early engagement often provides better long-term value than reactive assistance.
Sources
Advance Point Capital. “Small Business Success and Failure Statistics.” www.advancepointcap.com/small-business-success-failure-statistics
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Jennifer BrazerFounder/CEO
Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.
Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.
How Organizational Issues Impact Performance: Transform Your Business from the Inside Out
Organizational issues impact performance by creating bottlenecks in communication, reducing employee engagement, and draining financial resources through inefficiencies that cost companies 20-30% of annual revenue. These internal challenges—ranging from toxic leadership and outdated processes to cultural misalignment—directly influence productivity levels, innovation capacity, and ultimately your bottom line.
Over my two decades as CEO of Complete Controller, I’ve witnessed countless businesses struggle with the same invisible barriers: brilliant teams underperforming due to structural chaos, profitable companies bleeding talent because of management issues, and innovative startups stalling from process paralysis. The good news? Every organizational challenge contains the seed of transformation. This article reveals the five critical areas where internal dysfunction sabotages success, backed by data showing companies with engaged employees achieve 21% higher profitability. You’ll discover proven strategies to diagnose hidden problems, implement systematic fixes, and build resilient structures that turn organizational friction into competitive advantage.
What are organizational issues and how do they impact performance?
Organizational issues encompass internal challenges including communication failures, leadership gaps, process inefficiencies, cultural misalignment, and structural rigidity
Communication breakdowns delay project completion by 40% and reduce team collaboration effectiveness
Poor leadership accounts for $360 billion in annual losses through turnover and reduced productivity
Process inefficiencies waste 20-30% of revenue through duplicated efforts and operational bottlenecks
Cultural dysfunction decreases innovation output by 50% and increases employee turnover by 32%
The Hidden Cost of Managerial Relationships on Team Performance
Poor managerial relationships create a ripple effect that devastates organizational performance far beyond individual team dynamics. Research from Gallup reveals that only 36% of employees feel engaged at work, with direct manager relationships accounting for 70% of variance in team engagement scores.
Micromanagement stands as the most destructive force, reducing employee productivity by up to 85% according to recent workplace studies. When managers focus on controlling rather than empowering, they inadvertently create environments where innovation dies and top performers flee. Consider Deloitte’s transformation: by abandoning annual reviews for weekly check-ins and quarterly performance snapshots, they saved 2 million hours annually while boosting retention rates.
The financial implications hit hard. Companies with disengaged teams experience:
18% lower productivity metrics
16% decrease in profitability
37% higher absenteeism rates
65% increase in voluntary turnover
Building trust through consistent feedback loops and growth-focused conversations transforms these statistics. Adobe’s shift from ratings to regular check-ins reduced voluntary turnover by 30%, proving that relationship-centered management drives measurable results.
Process Inefficiencies: The Silent Performance Killer
Operational bottlenecks strangle organizational performance through death by a thousand cuts. IDC research indicates companies lose 20-30% of revenue annually to inefficiencies—that’s millions vanishing into procedural black holes.
Manual data entry exemplifies this waste, consuming 2+ hours daily per employee while introducing error rates of 1-5%. One manufacturing client discovered their approval process required 14 signatures for routine purchases under $500, causing three-week delays for basic supplies. After streamlining to a three-signature maximum, they reduced procurement time by 80% and saved $1.2 million annually.
Common efficiency destroyers include:
Process Problem
Annual Cost Impact
Solution Timeline
Redundant approvals
$50K-200K per department
30-60 days
Manual reporting
40% productivity loss
90-120 days
System silos
25% revenue leakage
6-12 months
Untrained staff
35% output reduction
60-90 days
Smart automation combined with process mapping uncovers these hidden drains. Start by documenting current workflows, identifying non-value activities, then systematically eliminating redundancies through technology integration and role clarification.
Cultural Resistance: Why Organizations Reject Their Own Medicine
Change resistance represents organizational immunity gone haywire—protecting dysfunction instead of progress. Harvard Business Review reports 70% of change initiatives fail, primarily due to cultural antibodies attacking new structures.
Fear drives this resistance through three channels:
Loss of control over familiar territories
Uncertainty about future roles and value
Past experiences with poorly executed changes
The human cost manifests in stress-related illness increasing 40% during major transitions, while productivity drops 25% as employees divert energy toward self-protection rather than performance. Complete Controller encountered this firsthand when implementing cloud-based systems—initial pushback came from team members fearing technology would replace them.
Successful transformation requires co-creation rather than imposition. By involving resistant employees in designing new processes, we converted skeptics into champions. Key strategies include:
Shadow boards where frontline employees shape change strategy
Pilot programs allowing voluntary early adoption
Public celebration of implementation wins
Transparent communication about both benefits and challenges
Leadership Gaps That Hemorrhage Organizational Potential
Leadership voids cost U.S. companies $360 billion annually through cascading failures in decision-making, talent development, and strategic execution. When leaders lack emotional intelligence or strategic vision, entire organizations drift toward mediocrity.
Toxic leadership patterns manifest through:
Decision paralysis causing 6-month delays on critical initiatives
Favoritism destroying team cohesion and merit-based advancement
Communication failures leaving 60% of employees confused about priorities
Innovation suppression reducing competitive advantage by 30-50%
Strong leadership development programs deliver 5.2x ROI according to Brandon Hall Group research. Focus areas yielding highest returns include psychological safety training, strategic thinking workshops, and 360-degree feedback implementation. One client increased revenue 40% within 18 months after replacing command-control management with servant leadership principles.
Building leadership bench strength requires systematic investment in high-potential employees through mentorship programs, cross-functional assignments, and executive coaching. Organizations excelling in leadership development experience 2.3x higher cash flow per employee and 1.8x higher profit margins.
Measuring Impact: From Dysfunction to High Performance
Quantifying organizational health requires tracking both leading and lagging indicators across multiple dimensions. Traditional metrics miss early warning signs, allowing problems to metastasize before detection.
Essential performance indicators include:
Leading Metrics:
Employee Net Promoter Score (eNPS)
Meeting effectiveness ratings
Cross-department collaboration frequency
Innovation pipeline velocity
Internal mobility rates
Lagging Metrics:
Revenue per employee
Customer lifetime value
Market share evolution
Voluntary turnover costs
Time-to-market acceleration
Benchmark data reveals high-performing organizations maintain eNPS scores above +30, while struggling companies hover near -10. The correlation between organizational health and financial performance strengthens over time—companies in the top quartile of organizational health generate 3x shareholder returns compared to bottom quartile peers.
Regular pulse surveys combined with exit interview analysis illuminate pain points before they become crises. Track sentiment shifts monthly rather than annually, enabling rapid intervention when scores decline.
Final Thoughts
Organizational issues impact performance through interconnected systems that either amplify success or accelerate failure. The companies thriving today recognize that internal excellence drives external results—they invest in leadership development, streamline processes ruthlessly, and build cultures where innovation flourishes.
I’ve spent 20 years helping businesses transform organizational chaos into competitive advantage. The path forward requires courage to confront uncomfortable truths about current dysfunction, commitment to systematic improvement, and patience as new structures take root. Start with one area—whether fixing a broken process or developing struggling managers—then expand success systematically.
Your organization’s potential waits behind the barriers you choose to remove. Take the first step today by auditing your most painful inefficiency, then contact the experts at Complete Controller to accelerate your transformation journey.
Frequently Asked Questions About Organizational Issues Impacting Performance
How quickly can companies see measurable improvements after addressing organizational issues?
Initial improvements surface within 30-60 days for process fixes, while cultural and leadership transformations typically show measurable results in 3-6 months. Full ROI realization occurs within 12-18 months for comprehensive organizational restructuring.
Which organizational issue should companies address first for maximum impact?
Start with leadership development and communication structures, as these create multiplier effects across all other areas. Companies fixing leadership gaps first see 40% faster improvement in subsequent initiatives.
Can small businesses afford to invest in fixing organizational issues?
Small businesses actually benefit more from organizational improvements due to their agility. Simple fixes like weekly team huddles or process documentation cost little but deliver 10-20x returns through efficiency gains.
How do you maintain momentum after initial organizational improvements?
Establish continuous improvement teams, conduct quarterly health checks, and celebrate incremental wins publicly. Organizations sustaining gains embed improvement into daily operations rather than treating it as a one-time project.
What role does technology play in solving organizational performance issues?
Technology amplifies good processes but cannot fix broken ones. Successful companies first optimize human systems, then layer in automation and AI tools to scale improvements—achieving 3-5x greater returns than technology-first approaches.
Sources
BambooHR. (2024). “Organizational Performance: What Is It and How to Improve It.”
www.bamboohr.com/organizational-performance
WeLearnLS. (2023). “Organizational Issues In The Workplace.”
www.welearnls.com/organizational-issues
Reckon FS. (2024). “3 Efficiency Drains That Cost Companies Millions.”
www.reckonfs.com/efficiency-drains
GetLighthouse. (2024). “Dangerous Organizational Problems: The Root Cause & Fix.”
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Jennifer BrazerFounder/CEO
Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.
Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.
Do you want to have a career that doesn’t bind you for hours each day and pays peanuts when the month ends? The corporate model is just not working for many anymore. The post-Covid-19 world and life are different in many ways. Companies are now focusing on providing work-from-home for employees. Apart from committing to work for hours daily, working from home is another form of freelancing. However, freelancing is one of the most popular ways to make quick money these days.
Freelancers are not regular contracted employees, so they are not bound to work eight or nine hours daily. On the contrary, a freelancer can choose the hours and days he wants to work. This way, freelancers can manage a lot of time at hand. Here is how you can maintain an excellent work-life balance as a freelancer:
Choose Your Working Hours
One of the telltale benefits of freelancing is picking the hours and days you want to work. Corporate employees don’t have this luxury as they are bound to a nine-to-five routine for five or six days a week. Freelancers have more freedom to maintain a proper work-life balance as they have no such restrictions to consider.
You are Your Boss
Freelancers enjoy a few benefits compared to corporate employees. A freelancer can boast of being his boss, and rightly so. He dedicates a chunk of his time to work while spending the remaining time in any way he likes. It only makes sense to become a freelancer with so much freedom as you will experience the joys of life without working your heart out day and night in a corporate environment.
Likewise, you can control your workload by choosing the amount of work and committing to the number of days you want. Clients understand that you work freelance, and they are not bothered by your work schedule. Freelancers provide high-quality work and make recurring clients that offer employment in succession. Such clients don’t worry about time as they communicate with the freelancer about deadlines. They will deliver the work.
You Have Options
Freelancing is all about options; those who do this for a living know this. Freelancers have plenty of workloads when they have work in hand, but sometimes they’ll sit without work. Such is the nature of this profession; accept it and be forthcoming. Fresh freelancers often get frustrated knowing they have no position in hand. It is nothing to worry about as clients always come, and when they do, you will have plenty of work in hand. It is where retaining clients makes sense as they employ quantity regularly. You might need to improve your portfolio, skills, and rating to win such clients. Doing so will let clients show faith in your abilities as a freelancer.
Mention the Days and Hours You Work
To balance your life and work, mention the hours and days available for work. It might work like a two-edged sword for freshers, but experienced freelancers can play around with this. Clients will come to you for work if you are known for providing value-added work anyway. Let your clients know about the value you associate with your personal life, as they’ll understand. It will remove confusion, and they’ll appreciate it.
Avoid Overcommitting
Sometimes, clients who bring more work are willing to pay more for it. Freelancers often fall for this and end up compromising their lives for work. It is necessary not to fall for this as you will compromise the balance. To avoid this, do not overcommit yourself to the client. Be explicit about priorities and let the client know about your work patterns. You will make good money by working on the days and hours of your choice. Stay firm on your commitments and communicate those to the client before the contract begins.
Following these tips will maintain a proper work-life balance without compromising on either of your commitments. In the meantime, it is best to continue exploring work opportunities during working days to make enough money to live a comfortable, easy life.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
The COVID-19 pandemic has had a very adverse effect on economies in general. Small and medium-sized enterprises have taken quite a hit to their finances with reduced revenues, limited clientele, and near-to innovations. Even though industries have seen they are ever highest given the increased reliance on digital mediums during the pandemic, a more significant portion of SMEs has struggled with maintaining their liquidity position.
For any company to survive, liquid cash is quite important. You might have good credit lines and great vendor relationships, but if your money arrives later than your due payments, the interest rates will likely get higher, landing you in much more trouble than expected.
Liquid assets are primarily those that can instantly convert to cash. A company’s liquid assets evaluate its strength to overcome timely financial obligations and debts. Lack of liquid funds is one of the critical reasons SMEs fail to stay afloat for a long while in the market and file for bankruptcy. SMEs must crucially evaluate their current assets and liabilities to gauge their need for liquid assets. This data can easily be obtained and evaluated by looking at the bookkeeping records.
Here are a few things SME owners should bear in mind to ensure an ideal liquidity position for their business:
Keeping Track of Financial Resources
In times of financial crises, when a small enterprise has nothing left to fulfill its loss and run the business, the most crucial thing is the lack of financial and valuable resources, including funding, experienced labor, and lack of accounting records, and marketplace statistics.
To overcome this obstacle, ensure your accounts receivable department bills your clients timely and chase any unpaid invoices as soon as they become due. If need be, you might also want to reassess your payment terms and reduce the payment period with your clients. Cash confined in unpaid invoices can cause severe liquidity problems. Consider offering your clients a discount for settling the bills quickly. It is also essential to rush up to any pending payments or reevaluate your payment terms to increase your cash flow instantly. With your old clients, you could use your goodwill to get early payments.
Management of Cash Flow
While going through financial crises, the most aggravating factors include expenditures. Regardless of the economic situation, business owners must pay all expenses timely. However, they might not have enough cash to clear all the costs at a time. Keeping updated records is necessary to avoid a sudden burden. Optimizing costs is the most important thing to do when dealing with a liquidity crisis. It helps business owners keep enough liquidity to handle a financial situation.
Negotiation with Suppliers and Lenders
In addition to the flow of expenses, postponing liabilities and payments is a clever strategy for recovering from liquidity crises. Suppose you are generally in good relations with your vendors. In that case, it’s time to ask them for a favor and delay your liable payments for some periods without the addition of any interest.
Lack of Funding Options
In case of financial crises, there’s a possibility that no lender would like to lend you a reasonable sum of money to enhance your current situation. It is because the lenders or creditors find it hard to put their trust in your drowning company. However, now is the time to start looking for alternate funding options. You could investigate government-based programs that offer to fund private businesses. Moreover, if the fundamentals of your financial conditions are not sound, borrowing money will take you even in the worst direction down the road. If borrowing isn’t the right option, you might consider raising funds by selling your equity to investors who are interested in your business.
Given the uncertain economic conditions worldwide due to the pandemic, it is wise for business owners to make learned business decisions and maintain enough liquidity to survive a sudden brunt.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
