Regardless of the product or service offered, the truth is that every business wants to grow. For this, more than developing strategies to attract more customers and be a market leader, it is essential to take care of the financial health of the company.
It may not seem like it, but not being aware of the day to day of finances and implementing healthy habits to deal with resources results in few conditions for achievement. If the company has more debt than income, if what it raises is poorly invested or if what it gets is insufficient to maintain it, it is a great sign that its financial health is not good.
Therefore, knowing the means to take care of this area is essential for any business. In this text, we will show you some of the main strategies. John Labunski!
How to maintain the financial health of your company? See 5 tips!
Finance-related processes always need more attention. This is because tinkering with business resources implies understanding whether they are enough to meet the company’s demands. At this point, it is not only necessary to control them, but direct them to bring good results. Also, there are some tactics to maintain good management.
Here, we will introduce what they are. Continues!
- Make the financial control
The first step is to know how the money arrives and how it is used by the company. As we know, the expenses of a business and its forms of income are varied. From the purchase of materials, equipment to investment in new initiatives, therefore, at the beginning, it is essential to register them.
First, accounts payable, which are basically expenses and other financial commitments that require the withdrawal of resources from the business. This includes rents, salaries, operating costs, taxes, etc.
Accounts receivable are directly related to sales values and return on investments. Here, management will have accurate information about the assets of the business, especially those related to term purchases.
- Set goals
More than setting goals, it will be essential in this part to develop strategic planning. It will help define what the company needs to achieve its goals, being a fundamental part of financial health, as it helps to understand business processes. Some of the questions that must be asked to build it are:
- “Where is the business?”;
- “How much do you have to invest?”;
- “What is the objective and in how long do you intend to achieve it?”;
- “What will it take?”.
- Have a working capital
Now we get to the practical part of controlling finances, which is managing working capital. As you know, it represents all the resources destined to keep the business running, that is, for operating expenses. Therefore, if the working capital is balanced, it means that the financial health is as well. On the other hand, if not, then it is time for management to focus on its elaboration.
The first step is to use the information collected in financial control, to understand how much the company needs to function on a daily basis. From there, it is necessary to define that this amount should be kept monthly, as a kind of reserve, for eventual needs.
- Predict future scenarios
This is a very important step towards achieving the goals, because making forecasts of future scenarios is a way to help define what the next steps of the business will be. They even help to avoid certain types of behavior that are harmful to financial health. After all, the objective is not only to make predictions of positive results, it is also necessary to think about complicated scenarios and encourage management to find solutions for them.
A fundamental initiative for this step to work is to always keep up to date on issues in the sectors related to the business. At this point, political and economic news should be consumed by management. Not only follow newspapers and specialized magazines, but also consume blogs, podcasts and anything else that can help to be more aware of what is happening in the business world and in the economy.
- Manage the level of customer delinquency
Finally, one of the most important initiatives to maintain the overall balance of the business is to pay attention to the level of delinquency. Small and medium-sized businesses may believe it’s impossible to control which customers pay and which ones have a history of debt, but such management is a crucial part of financial health.
What should be kept in mind is that it will be very difficult to have customers who always pay, there are many reasons that make the consumer unable to pay their debts and most of them are beyond the company’s reach. Therefore, what you can do is create strategies that aim to manage and even prevent certain behaviors. It is necessary to invest in a collection control team.
Why hire John Labunski Dallas?
With years of experience, we at John Labunski Dallas have the right service to provide better ways to manage customer collection, including helping to control default. We not only offer tools for queries and data crossing, but also a team focused on personalized service for each type of client, improving liquidity and reducing the receipt cycle.
After all, charging a customer is a risky process and poor service can make the company lose you forever. Therefore, the best solution is to invest in a professional service.
Throughout this text, we present some of the main tips to take care of the financial health of the company. One of the fundamental themes for the day-to-day of the business, as it is directly related to fundraising and also in the way they are managed. Therefore, investing in initiatives that aim to improve finances, such as controlling and knowing expenses, setting goals and managing delinquency, are necessary.
Would you like to know more about how to take care of the company’s financial health? Do you need to improve your business’s default management? So, get to know our services, we have professionals ready to serve you!