As part of your cash flow forecast identify your capital expenditure requirements. Don’t deal with these on a one-off basis as they arise, plan them in advance.
Expect the unexpected
Growing to death is often the result of unplanned growth opportunities. It’s ironic that seizing a major sales contract or big new client can be your business’s ruin but its more common than you think.
Many business operators are very good at what they do. Most have an excellent knowledge of the business they conduct and understand their products and services. Most also have an in depth knowledge of sales performance and revenue. Few however, have a high level of financial management expertise, so when a big new opportunity presents, critical financial questions are not part of the vocabulary. As a result, there can be a sudden and unintended impact on their financial position. A rush of sales might be a great thing but it is not always counterbalanced by a rush of income and profit. Free cash and liquidity are the victims.
For businesses without strong financial management and control, there is simply no way of understanding what impact the opportunity will have until they have experienced it. With no background history to rely on, the warning signs of impending financial crisis don’t appear.
Take all the tax advantages you can
For small business in particular there are a range of concessions and funding you can access. Many businesses simply don’t realise the opportunities available to them.
If you are considering outsourcing your bookkeeping, accounting and other business-related processes, but still allow you to make the big decisions and remain in control, contact PJS Accountants. We have has over 30 years experience with local Redlands businesses. Our team will be at your disposal, always ready to receive your calls and provide services, to help you to stay in charge of all aspects of your business. Call us for enquiries on how PJS Accountants can help you improve your business.