Common Small Business Cash Management Problems
When managing a business, it is quite common that there are times where you lost track of the finance of your company. You may be spending a huge amount of money on a few unnecessary utilities and in the long term, you will find your organization to lose money out of nowhere.
In this case, it is crucial for the company’s management to always keep all records tracked and be well aware of the status by using software that is able to integrate all of your information, allowing you to avoid any human error while transferring the information from one place to the other. For example, Netiquette Software provides a complete set of business solutions such as Accounting, Inventory, Payroll, Customer Relationship Management and Point of Sales that is able to integrate into all aspects.
- High Overhead Cost
When business is growing, owners may overlook or even invest too heavily in utilities such as:
– Accounting and other legal services
– Employees
– Rent and supplies
– Office equipment
– Licenses and insurance
Starting from the most basics, the company had to do yearly internal audits to keep with the pace of the organization. When you find your overhead is too close to the revenue you’re bringing in, the company could try to apply for a funding solution for the business as it would be a tremendous opportunity for the company. - Inventory overflow
Unsold and excess inventory is the result of buying or manufacturing more materials than what your customers demand called for.
The best solution for this inventory problem is the organization’s warehousing methods. Place a priority on watching things like demand trends and projected sales, investing in inventory management software to ensure all management are kept on track of the inventory available. - Low profit
It takes time to build up a brand and a consistent book of business. However, those costs will keep coming in all the same. One of the major problems with your cash flow issues may be that your products or services have a very low price point.
There are a few suggestions to this such as highering prices on products, dropping products, or adjusting prices based on the costs of each individual service.
In addition, your organization could also apply for a funding solution for your business to handle those costs while your company gets its footing. - Doubtful debts
Doubtful debts are often debts that are not likely to be paid by the particular purchaser or business. When there are too many pending payments that are not being made for 2 to 3 months, it will be hard for a small business to continue to operate in business. Therefore, companies should ensure their customers pay within a given certain timeline by adding it under the term and conditions and allowing legal action to be taken if not paid. Another way is to give them a small percentage of discount when paid within 3 days after the invoice is sent out is a way to encourage early payment.
Check out Netiquette Software today! Netiquette Software has the most complete set of solutions from accounting, inventory, payroll to CRM without having to worry about integration with another 3rd party website.
