Recommendations to ensure that the stable finances of a business are maintained

Having healthy finances within a business means achieving a balance between the income, expenses, debts and investments of an organization. To achieve this objective, it is necessary to have an accurate planning and administration of resources.

Establishing budgets and financial plans is one of the most important tasks in a venture. Take into account that 16% of companies that fail do so due to financial problems, according to information from the Failory website.

61% of small businesses do not make annual budgets and this problem increases in companies with one to 10 workers. Of these, only 26% carry out these processes, according to information from Small Business Trends.

To have profitable businesses, the first step is to have healthy finances that allow you to constantly improve and grow. Business owners have the obligation to know the financial status of their companies so that, in this way, they can undertake strategic actions to meet capitalization needs.

How do I identify if my business has stable finances?

The first indicator that can give you certainty of sound financial management is being in the black, that is, more money coming in than you spend. But within this indicator, you must also observe how other relevant aspects behave to consider that a company is profitable. Take note:

• Income is constantly increasing
• Expenses are stable and exceed variable expenses
• You have a good cash balance
• The percentage of indebtedness is low
• good profit margin
• You generate new monthly customers and keep your recurring customers

The best action you can implement to establish the financial status of your company properly is to hire an accountant to analyze and order your financial information. You can call on temporary professionals specialized for this task.

Tips for making, monitoring and meeting my budgets

If you know the capital you have, you will be able to prepare realistic and accurate budgets for the operation and administration of your company. Get to know some digital tools that will help you prepare and monitor budgets in your company:

Mint

It is an app in which you can synchronize your bank accounts, credit cards, loans, investments and invoices. As a budgeting tool it is highly functional. Among its benefits stands out the possibility of adding the categories in order of relevance, as well as automatically ordering your expenses and income. It is one of the top-rated apps on the App Store and Google Play.

You Need a Budget

This digital tool is focused on future planning of expenses. It suggests, taking into account your income, what amounts you should allocate for savings, investments, expenses and more indicators according to your objectives. Additionally, it offers resources and educational content on business budgeting on its website.

EveryDollar

In its free version you will have to add your income and expenses manually, but with the premium version you can synchronize accounts and cards automatically. Additionally, it is an excellent tool for budgeting from scratch. This app is ideal for keeping track of your expenses and achieving profitable businesses.

Strategies to improve profitability

The economic profitability within a company depends on achieving the highest average profit or utility with respect to the investment made. Here are some tips that will lead your company's ship to a safe harbor.

• Reduce expenses: Within the administrative and operational processes of your company there are expenses that can be reduced without having to sacrifice quality, identify and eliminate them.
• Optimize your production: On many occasions the costs of raw materials or products are modified, we absorb this change and do not reflect it in the final price. Analyze your production costs and update your prices.
• Periodically review your business plan: No plan is written on stone. Sometimes it is better to redirect your effort to the products that give you the best profits or the ones that are most popular, than to try to revive one that is not generating the results you expected.
• Be part of the gig economy: Outsourcing labor will help you employ specialized workers, without having to include them on the payroll and hire them only per project.

Important aspects in finance for entrepreneurs

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Bandenia Challenger bank Limited is an international trade facilitation and investment brand created to manage and solve global trade finance documentary needs.