The number one reason for business falls – is cash flow! The business works well, rolling money but the pit in the bank account is growing every day. Sometimes it seems like a business has a lot of money in the account and suddenly there are unforeseen expenses such as a check to a supplier that suddenly goes down, or an old debt to Social Security and again the deficit grows. An outstanding business does not accumulate debts with anyone – neither with suppliers or their bank. Income Tax? An outstanding business in running their business pays more than they should but if your accounts are not handled well, you could find that you are paying extra in fines when things do not go to plan at your next tax return. 

A business that excels in running the business financially realizes that there are expenses that are not met every month but someday they will come up such as: a major car repair, purchasing expensive tools or a “not on us” customer claim. Therefore, they always leave enough money aside for surprises. You should always consider good financial advice and therefore you can browse around this website for more.

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Bank accounts and transferring money between accounts

A manager that knows how to run a business understands that the bank account of the business is not the private account – it separates the accounts completely.  You should also always use a professional account, either in-house or outsource this service. Regular meeting with the accountant is important. An outstanding business that knows how to run its business financially correctly does not trust the accountant with their eyes closed. They understand that the accountant has hundreds of other clients so they initiate one regular meeting with them every three months. At the meeting they go through the accounts with them and ask for a detailed explanation of everything. How much do you pay per body? Why? Are there any obligations? Are there any other recognized expenses that are not being utilized? Consult with them. Is it worth buying a car, how to finance it? Are all the payments required by law paid to employees? 

Check that payments are going down each month if they have previously been high and in the red – the business that knows how to run is not afraid to go over the numbers and check that everything is beating properly – suppliers, social security, tax advances, pension provision, investment provident fund. It is important to check every month that the above payments are indeed deducted from their bank account at the right time and in the right amount. There have been cases where accountants have complicated good business because they did not transfer the money to the authorities on time (and there were even accountants who stole from the business). An outstanding business goes into the bank account at least once a month and goes through all the money that comes in and out and checks that it understands what each line says. Finance is important, so be sure that you’re on top of it all.