If your business is hemorrhaging cash, it won’t be long before you reach critical status and something needs to be done. Knowing the signs to look out for will help you to take action before things get dire and you’re really in trouble. Below we have a few signs that should give you a good idea of whether you’re handling your finances well or not. Take a look.
You Can’t File Your Taxes
Taxes are one of your greatest expenses, and if you are unable to do them it’s a huge sign you’re not managing your cash flow. When you fail to do your taxes, you’ll be subject to excessive costs plus penalties. Preparation is the best thing you can do when it comes to your taxes. Always keep track of deadlines and meet with your accountant so you can discuss your plan of action.
You Aren’t Tracking Your Expenses
Tracking your expenses is key, and your utilities, rent, and payroll are just a few things you need to ensure you’re tracking accurately. You need to know how much you’re spending and earning so that you can set up a budget and stick to it.
You’re In A Ton Of Credit Card Debt
If you’re in a ton of credit card debt, you’ll be paying interest rates off by the dozen and you certainly won’t be building wealth. Credit cards can be useful when you’re earning rewards or you need to make an emergency payment and you have no other choice, but you must make paying off debt your priority. Pay a little more than the minimum each month at least.
Your Customer Invoices Are Not Being Paid
If an invoice isn’t paid within 90 days, more often than not, you’re not going to get paid. Only 18% of invoices get paid after 90 days. You can’t cover your expenses if you’re not being paid!
Invoice promptly and frequently, and consider using invoicing software to send out automatic payment reminders. Staying on the ball with your invoices is so important.
You’re Trying Too Hard To Keep Up With Other Businesses
If you’re focusing too much on materialistic things, you’re going to have less money for putting towards improving your business. Don’t be impractical, be smart. Look at sites like www.EquifyAuctions.com to find equipment you need at a great price, or even to sell equipment that you don’t really use.
You Don’t Have An Emergency Fund In Place
An emergency fund is a must for unexpected expenses, and so that you can avoid loans and lines of credit. Automate your savings so you don’t even have to think about setting one up.
You’re Not Making Good Decisions When It Comes To Hiring/Outsourcing
It’s much cheaper to retain employees than it is to keep on hiring them. Make sure you focus on keeping the employees you have happy, and only outsource when you truly have a need for it. Many business owners become obsessed with outsourcing and this leads to lots of wasted cash!