Not Keeping Track of Your Financial Situation Can Kill Your Business S

Not Keeping Track of Your Financial Situation Can Kill Your Business Success

Dr. Linda Hancock

ABOUT THE AUTHOR

Dr. Hancock has written a regular weekly column entitled “All Psyched Up” for newspapers in two Canadian provinces for more than a dozen years. Over the years, her readers and clients have said that they have benefited from her common-sense solutions, wisdom, and sense of humour. Dr. Linda Hancock, the author of “Life is An Adventure…every step of the way” and “Open for Business Success” is a Registered Psychologist who has a private practice in Medicine Hat. She can be reached at 403-529-6877 or through email office@drlindahancock.com

Published

February 21 2011

As a business owner, you are responsible for the well-being of all aspects of the finances. Ignoring this or pretending that things are really better than they are is not a healthy way to deal with things.

No matter how much staff you have employed, there are certain things that you need to do to make sure that the right decisions are made and the reputation of the business is respectable.

Make sure that you know exactly how much money is needed to pay all the bills each month - and pay those bills on time. You do not need to pay them on the date that the invoices are received but make sure that they are paid by the due date to save yourself being charged interest.

Also, keep track of any accounts receivables that might be owed to you. Frequently I make email or telephone contact with organizations about unpaid fees only to find that an invoice that I had sent them is missing or staff changes have allowed payment to be delayed. This is your money and you need to keep on top of things so you receive what you have earned.

I always know my bank balance and the interest rates that will be charged for credit cards and line of credit. This way I am able to take advantage of sale items at the lowest price without losing my cost advantage by using borrowed money to pay for them.

Know how much you earn in a day. That will be motivating for you and help you to make adjustments to your financial situation as situations occur rather than waiting until the end of the year and then being shocked by not meeting your goals.

Compare your sales and profit with the previous month and the previous year so you know how you and your business are doing. It only takes a few minutes at the end of the day to check the Report section of your software.

Even if you have a bookkeeper, it is important that you review specific financial reports on a regular basis. Ask for the Profit and Loss Sheet, Monthly Sales record and a listing of both Accounts Payables and Accounts Receivables. That way you will not be surprised (or embarrassed) by not having important information or making a purchase that the business really can't afford.

You see, as a solo professional there are many things that you can delegate but your financial situation is not one of them.