All you want as an entrepreneur is to have good luck in business, financial health , more profit and longevity. All of this combined with more free time, happiness and quality of life. And how can you have all of this? Keep reading and check out some tips:
The routine of a small and medium-sized company is full of countless challenges. There are limited financial resources, an increasingly competitive market and the entrepreneur ‘s desire to make a profit. And controlling accounts payable and receivable becomes essential given the need for growth.
Effective financial control involves keeping your accounts payable and receivable organized . You need to be able to evaluate what has been done in the past and what is happening in the present, so that you can establish strategies that can result in good results.
As a rule, if your financial management is unable to control accounts payable , the company ends up not honoring its commitments and spending more resources than it should, as interest and fines will be charged.
The same happens with receipts , if the company cannot determine how much resources will come into cash, it will not be able to make the necessary investments and, consequently, will have a negative cash flow and a lack of working capital.
With this in mind, we have prepared some tips that will help you maintain greater control over your accounts payable and receivable more efficiently. Check it out!
1. Separate personal accounts from business accounts
Mixing personal and business accounts is a very common practice in micro, small and medium-sized businesses. Every now and then, the entrepreneur is taking money out of the cash register to pay for their children’s school fees, groceries, car expenses and other personal expenses. When this practice is carried out, the entrepreneur ends up losing total control of both their household and business accounts , with the latter tending to go bankrupt first.
The key to avoiding the risk of compromising your business is organization , that is, separating your personal life from your business life . For small entrepreneurs, this becomes even more complicated due to a multifunctional routine, divided between controlling inventory, managing, selling, paying employees, among others.
One tip here is to define monthly withdrawals through the pro-labore . Think that if you withdraw the company’s profit , your business will be left without capital.
2. Prioritize bills to pay
If your company is having trouble paying its bills on time , prioritize those that, if not paid, could affect the execution of activities. In other words, if you don’t pay your electricity and water bills, they will be cut off, right? And you will have to interrupt the flow of production, right? So, before allocating money to other things, make sure that the highest priority bills are paid and, if they are not yet due, set aside so that you can pay them off throughout the month.
A cash flow management system can help you organize this process. It sends you daily reminders about the bills that need to be paid or collected on the day. This way, you don’t run the risk of forgetting to pay an important expense.
3. Control your salaries
The biggest mistake many entrepreneurs make is not knowing how to identify short, medium or long-term accounts or not keeping any type of record or control .
Strict control of all company movements allows the entrepreneur to know what he has to pay and how much he will receive, avoiding fines and interest due to delays and investing resources that have not yet entered the cash register.
4. Implement a financial management system
Monitoring accounts payable and accounts receivable in an automated manner has been the solution found by many managers to avoid major problems for the business .
The use of financial management systems that organize what the entrepreneur will have to pay in a given period or even what he will receive, keeping constant monitoring of movements, allows the manager to assess the financial health of his business, negotiate deadlines or even establish strategies that contemplate better results and the growth of the company.
Furthermore, with the use of software , typing errors and rework end up being eliminated or even reduced, which optimizes the time spent on carrying out activities, reduces costs and increases productivity.