Having financial control of your business is essential for the company’s health, so this is a sector that deserves special attention from managers.
The loss of financial control is one of the main causes of company mortality in Brazil, and the numbers do not show that the financial health of businesses in the country is going well.
According to data from Serasa, there are more than 5.4 million defaulting companies and 4.2 million declare that their financial situation is not comfortable.
To avoid this happening to your business, prevention is the best way, so check out some tips below to avoid losing financial control of your company.
Separate business and personal finances
Financial control starts by separating your business finances from your personal finances.
Losing control of what are personal expenses and what are company expenses is very easy, and when this separation is not done well, it can cost you the good performance of your business or even its survival.
To make this division it is essential to subtract an amount from your company’s profit and “pay your own salary” for this, determine how much will be paid to yourself for personal use, and above all, keep separate bank accounts.
Make a financial safety
When it comes to money, we cannot underestimate the unforeseen, because they do happen and not being financially prepared for them can be your worst mistake.
To prevent unforeseen events from destroying your business, having a financial reserve that covers the costs of at least 2 months of operation is essential.
Paying off debts
Having open debts is a way to increase losses with expenses such as fines and interest.
Besides making your company’s costs higher and profits lower, debts can lead to the negativation of your CNPJ, making the financial health of your business even more difficult.
Manage well what makes the money go round
Having total control of what is being spent on stock or labor is essential not to lose the financial control of your company.
To do this, always be aware of the accumulation of goods in stock that may be in storage and even expired before being sold.
Moreover, know how to value and invest in products or labor that have more output and that bring you more capital.
Invest in innovation and technology
Agility, practicality, and efficiency are achieved by investing in innovation and technology.
Automating processes and using technological resources to optimize management processes is the best way to grow your business and ensure its financial health.
Conclusion
There are many factors that can take your company by surprise and make you go through a great financial difficulty, but some of them can be foreseen and well managed.
Do what is in your hands not to lose financial control of your company and make sure that what is under your control is properly done.