Business financial management: 8 signs that it is going wrong
We decided to write this article to show you 8 signs if he is going bad and how to solve these setbacks. Want to know more? Check out! Good reading!
1. Followed declines in billing
Everything you sell in your business needs to have a profit margin, right? Therefore, if your company has been suffering from consecutive drops in billing, the problem may be in the pricing of your products.
Incorrect pricing can occur for different reasons, either to try to “beat” the competition’s prices or simply because the entrepreneur does not know how to calculate his own profit.
However, this is not the only reason for the drop in revenue. It is also necessary to observe whether, perhaps, external factors are providing this negative result for the company — perhaps this is a reflection of the country’s economic situation or the change in the habits of its consumers, for example.
The ideal thing is that, at first, you identify what has caused your revenue to drop and then create strategies to overcome these difficult situations — this will help to recover your profitability.
2. Constant requests for loans
If your company constantly needs to resort to bank loans, this is another sign that it is in serious financial trouble. After all, the interest and administrative fees on loans are extremely high and make you increase your debts instead of paying them off.
This is an attitude that compromises the finances of your business too much: with so much interest to pay, the company does not have the money to make new investments and grow.
To solve this problem, it is interesting that you analyze other solutions — how to anticipate your receivables, for example. Thus, you solve most of your financial problems and do not accumulate debts.
3. Mixed personal and business finance
This mistake is very common among entrepreneurs , made even by the most experienced ones. Mixing personal and business finances is a very serious flaw, as this attitude contributes to the lack of financial control and makes you not know how much cash you have available, thanks to sporadic cash withdrawals.
The right thing is to create a pro-labore for yourself and organize your personal finances according to the amount you will receive at the end of the month. The remaining amounts in cash must be directed towards the company’s commitments and new investments.
4. Deeds forwarded to the protest registry office
When a title is forwarded to the title protest office, many amounts are included in the debt – in addition to the usual interest and fees. However, not all of these amounts go to the creditor, okay? It works like this: a protested title undergoes changes in interest and fees that were imposed at the time of the contract.
After that, the bank forwards the title to the distributing notary, where the protest distribution value will be charged — this is calculated on the protested amount. Then the title is forwarded to the protest notary, where all notary expenses will be charged — including those of the official who will deliver the subpoena to the debtor.
All these charges are permitted by law and are mandatory. Therefore, it is of paramount importance that you give preference to paying off this type of debt as soon as possible, so that they do not accumulate and compromise your budget.
5. Late payment of taxes
Tax is serious business . There’s no way out, you have to pay — otherwise your business is in serious danger of going bankrupt. When the company fails to pay taxes, interest rates increase and it becomes increasingly difficult to pay them off.
As a result, it is likely that the company will be legally executed, running the risk of having its assets seized and auctioned. If the pledged assets do not meet the debt amount, the entrepreneur and his partners will be included in the process and may also lose their assets.
Therefore, if your company has tax debts, look for the creditor authority as soon as possible and pay your debt in installments.
6. Uncontrolled cash flow
Not having control over your company’s cash flow is very dangerous, as you can contract debts that you will not be able to pay in the future. The solution to this problem is to rely on technology and get rid of manual controls that leave too much room for error.
However, it is also necessary to have discipline to keep everything in order and not fail to register any value. The advantages of technology is that it provides accurate reports of your finances, assisting in decision making.
7. Sales stagnation
If you notice that your sales are not keeping pace with market growth — or worse, that they are decreasing — this is a sign that your strategies need to be revised urgently.
The problem may originate from marketing strategies , failure to capture new customers, brand positioning or product analysis . First of all, check where the inaccuracy is, then review your methods and change them as your customers need.
8. Use of overdraft
The use of overdraft is one of the most expensive actions on the market. After all, your interest is extremely high and, if you are unable to pay it, the debt can multiply very quickly.
Therefore, before resorting to overdraft, review all your financial planning and cash flow to find another solution and avoid this option as much as possible.
Corporate financial management is the foundation of any business. Every department in the company depends on it and that’s why it must be managed impeccably. Leave no debt behind and solve your financial problems as soon as possible.
