Wednesday 17 June 2015

Why financial planning is important for your business?

Being a financially sound business isn't just about having accurate accounting, although this is important. Businesses must be able to build better cash flow both presently and for the future as well as build assets, increase savings and even build up an emergency fund should anything go wrong.


In order to do all these things successfully, businesses must learn to do the following...


Businesses which budget are more at an advantage as it allows for the recognition of spending trends as well as the identification of short-term financial shortfalls and trends. Budgeting can also show how well a company meets its savings goals. Although budgeting may seem like a short term tool, it can create a long-term solution especially when it is combined with expert financial planning.


Financial security can be achieved or even strengthened by addressing any cash flow concerns your businesses faces as soon as they appear. Online credit control systems can help to improve cash flow, reduce unnecessary paperwork as well as save you both time and money. Positive Collections provides a FREE online credit control system with no software to download, install or upgrade you can access your account anywhere and anytime.


Find out more here.


By having an emergency fund can help provide you with the cash required when something unexpected happens. In order for an emergency fund to work, industry experts have predicted that businesses will need at least 30 days of working capital. This is usually equivalent to 3 to 6 months worth of operating expenses.


What is capital?


Capital is the total amount of cash-on-hand as well as the value of your assets. By building upon your capital, businesses will be more financially secure. In order for a business to grow, capital is required.


In order for businesses to earn more income, business owners will often invest extra cash rather than keeping it all cash on hand. If a business faces negative cash flow, they will use their assets to overcome this.


By managing your cash flow effectively and developing an emergency fund will help your business grow savings, add assets and also create liquid capital.


If you are thinking of improving your businesses cash flow simply call us on 0208 313 7887 or visit us online today to find out more.