The Most Harmful Finance Leaks Every Small Business Has To Deal With
A business owner needs to know what’s coming in and going out. This is the basics of financial management, and it’s the kind of thing you should aim to get right from the beginning. After all, organized finances are one thing, but knowing where the leaks are in your finances will provide a whole new level of control over them.
And when you’re a small business owner, there are a lot of harmful money leaks you need to know about! Some of the most dangerous are listed below; are you aware of them in your business? It’s time to double check what they’re costing you and see what you can do about it.
Employee Turnover
Have you had to hire multiple people in the past year? Then you need to look at your employee turnover rate. If you’ve been hiring to fill positions that have been quickly vacated, there’s a sign there’s something wrong with your hiring process.
You could also be dealing with problems within your workplace culture, so it’s worth it to investigate here as well. There are many business owners out there who have no idea there’s a toxic member amongst their staff, and dealing with this ASAP will help to keep that turnover number low.
Lost Shipments
Losing any product is harmful to a business’ finances, but if you’re shipping in bulk and the whole truck seems to go off grid, that’s a lot of money straight down the drain. It could also mean the loss of a customer, if they decide to take their business elsewhere, and that could lead to even further profit damage.
You can protect your business against the ravages of this loss by taking out transportation surety bonds on things like freight shipping, but it’s always best to have some kind of insurance in place when working with a logistics partner.
You should also double check their own policy regarding missing shipments, and what you’re entitled to as a client who’s lost out.
Late Invoices
It’s been over 30 days and that customer still hasn’t paid their invoice – what can you do? Most business owners tend to let payment issues like these go; they often feel like a lot more trouble than they’re worth.
However, doing that could set a precedent for being taken advantage of. That’s why we always recommend following a missed and/or late invoice right through to the ultimate conclusion.
If that means you have to take legal action against a certain customer, you are well within your rights to do so. Remember, you delivered on your service, which means you are owed payment – don’t let the hole this leaves become a common thing you have to deal with.
And in future, make sure your terms and conditions regarding payment are clearly set out and always enforced.
Finance leaks affect all small businesses. However, you shouldn’t let them go on for too long; investigate, close them down, and save money in the future.
The Most Harmful Finance Leaks Every Small Business Has To Deal With
