Running your own business can be really exciting, but it can also be tricky. One of the most important things to get right is managing your cash flow. We know – thinking about cash flow is painful and boring! You have started your business to follow your passion, or because you are really good at it! Not because you dreamed of managing the cash flow, right?
Cash flow is all about making sure you’ve got enough cash to pay for everything you need to run your business. However, doing this on your own, without any proper help, will generate exactly the result you are getting right now. That can be pretty risky and downright stressful. That’s why it’s important to understand the potential risks.
Here are the top 8 risks you’ll face when managing your business’s cash flow without help from a financial professional:
- Your books may never be up to date! If the starting point is all wrong, so will your cash forecast.
- Your books might simply be wrong. See the previous point.
- You could struggle to make a realistic budget, which could lead to spending more than you should and not having enough cash to cover your bills.
- You might not know enough about taxes to make sure you’re setting aside the right amount at the right time, which could result in fines or penalties.
- You might not have enough cash reserves to deal with unexpected expenses or emergencies, leaving you in a tight spot.
- Poor credit management could lead to late payments and a damaged credit score, making it harder to get financing or loans in the future.
- You might not have a good invoicing and collections system in place, including back-up plans, which could result in delayed payments and less cash flow.
- Taking on too much debt or debt with a steep repayment profile could leave you in financial trouble down the line.
Managing cash flow is crucial for any small business but it is a superpower for only a few. Getting help with this may hold the key to you sitting comfortably on a pile of cash. To make sure you’re on the right track, it’s a good idea to seek out the advice of your accountant.
With the help of the BridgePoint Group team, you can avoid these risks and keep your business moving forward. Contact us on 1300 656 141 for help to improve your cash flow.