SavvyprobookkeepFinances are a major challenge that entrepreneurs deal with on a daily basis in their businesses. Often, an entrepreneur is fully equipped to execute his plans, but his limited resources prevent him from taking full use of them. This makes it clear that maintaining proper control over the accounts payable and receivable department is crucial to the financial stability of businesses.
There are periods of the month when disbursements are always larger. However, if there is no effective cash flow control , the company will not be prepared to make payments and it will always be the same rush.
So that this doesn’t happen to your business, in this post, we’ve brought you 5 essential tips for organizing your finances, keeping accounts payable and receivable up to date. Read carefully and check it out!
How important is the accounts payable and receivable sector?
This is, basically, the heart of the financial sector: it is through it that all the company’s inflows and disbursements are controlled. Therefore, to guarantee the financial health of the business, it is essential to know the financial cycles and pay your obligations on time.
Regardless of the size of the enterprise, making this control a rule is extremely important for business continuity. When the manager has a broad view of how much comes in per month and what the prospect of future revenue is, it is possible to safely plan future investments.
At this point, so that surprises do not occur, serious management of working capital is essential , under penalty of generating serious consequences for the business from a financial point of view.
Likewise, by checking sector reports, the entrepreneur will be equipped with information such as how much the company owes on the market, preventing possible errors in the financial management of the business.
How to organize accounts payable and receivable?
As you can see, organization is the key to success in managing finances. Therefore, it is necessary to exercise this practice in the accounts payable and receivable sector to leverage results and enhance the growth of your company.
Thinking about helping this organization and ensuring that your establishment’s cash flow is not compromised, follow some essential tips below.
1. Keep all records
Recording all the facts is essential so that the cash flow is fed with real values. Regardless of the amount, it is extremely important that everything is recorded.
Only after these launches will it be possible to have effective control of operations, observing when and how much inputs and outputs will be. However, it is worth remembering that the cash flow must be fed and checked daily.
In general, this tool is powered by the accounts payable and receivable sector, showing, once again, its importance for any enterprise.
2. Pay attention to deadlines
This is one of the most important factors within the accounts payable and receivable sector, as all activities revolve around deadlines. When you miss payment dates, the immediate consequence will be the incidence of interest — which, in the long term, can directly affect the survival of the enterprise.
Regarding receipts, deadlines are essential as they represent when customers will pay their debts, resulting in money entering the cash register. From this, the destination of each value is organized, such as paying bills or future investments. Furthermore, it is with this value that the business guarantees working capital.
For this reason, it is essential that there is planning of the deadlines granted to customers, so that the inflow of values occurs before the outflows. Otherwise, greater working capital will inevitably be needed so that expenses that fall due before receipt are paid.
3. Separate personal and business expenses
This is the worst of mistakes, as paying personal expenses with the company’s money prevents the entrepreneur from working with real data on how much is being generated in relation to the activities carried out.
Furthermore, it is worth highlighting that the vast majority of companies incorporated are limited liability companies, the famous LTDA. The main reason for the massive choice of corporate type is that the partners are responsible for the amount they invested in the company, with personal assets shielded from creditors. However, when this patrimonial confusion occurs, that is, personal payments by the company, there is the possibility of disregarding the legal personality and breaking this personal patrimonial shield, obviously respecting the rite of legislation, bringing enormous risk not only to the entrepreneur, but also to his family. and your business.
Therefore, it is essential that the values generated by business activities are invested in maintaining the business itself, until it starts generating profit.
One tip for the entrepreneur to be able to support himself and not use the company’s money inappropriately is to stipulate a pro-labore fee : even if other rules are followed, this amount would be like a “salary” for the entrepreneur. Another way for a businessman to earn income is through the distribution of profits.
4. Control charges
Having a close relationship with your clientele is essential to retain them. However, this cannot make cash flow unfeasible. Therefore, create a plan offering advantages and benefits to those who pay in advance.
For customers who have difficulty paying on time, create different ways of charging. In cases where there is no prospect of receipt, offer installments so that the consumer can comply with the obligation.
5. Invest in technology
Computerization has streamlined and made many processes within companies viable. However, for this to truly be something positive, it is necessary for business owners to invest in software that will help improve day-to-day routines, generating reports and information in a timely manner for execution.
Search for companies that study and analyze the characteristics of your business and implement the system according to your needs.
When it comes to finances, any mistake can have devastating consequences for the enterprise. For this reason, strategic planning helps managers in the organization. When working with reliable data on what happened in the past, designing future provisions consistent with the company’s reality becomes easier.
When these practices are carried out, it is possible to work with cash on hand, in addition to paying debts on time. This way, you avoid paying interest and fines with suppliers and, mainly, taxes.
Often, when these tips are not followed, business owners become disoriented and do not know what decisions to take to reverse a situation of lack of control and losses. It is at this moment that consultancies emerge: companies specialized in planning, studying and analyzing your enterprise, to establish actions that aim to make a profit and boost the growth of your business.
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