Signs a Business Might be Having Financial Difficulties

It can be very worrying how easily a company can get into financial difficulties, the problems can arise from many things, it isn’t always down to the way you run your business. However, no matter what the cause is, the important thing is that you know what to look for. Remember, there are many Company Rescue Specialists out there to help you.

Below you can find a variety of things that you should be mindful of. 

Orders Slowing Down 

If you notice that your profits are starting to reduce and you are not getting as many orders come in, then this is a definite sign that you need to investigate. If this happens, you should take time to find out where it is going wrong. This sort of situation can be down to many things, for example, it might simply not be the right season for your products, but it could also be down to something a lot more serious. Make sure you review every aspect of your business from marketing to accounting. 

High Staff Turnover

Having a high turnover in staff can affect your business financially as you could be wasting valuable resources such as time and money on training new staff. You could find out that you don’t need to worry as the new employee could easily fill the shoes of the former, but it is good to be prepared just incase. In order to reduce staff turnover, think of creating a recruitment plan so you know exactly what you are going to be asking for and then you know whether they will meet the criteria. 

Customers Not Paying on Time

If you are working with other companies and relying on them to pay you, then this can cause you problems. For example, your cash flow could be seriously affected if customers are not paying you on time for the work you have done. It is important to chase your customers with persistence and give them ultimations if it comes to that stage. 

Not Being Able to Pay Debts Back

If you have found that your debts are mounting up then you need to take a look at ways to improve your cash flow and get back on track. There are many ways you can do this, by preparing weekly cash flow forecasts which shows you when payments are due, or talking to your bank and putting a temporary loan in place. 

Getting Your Business Back on Track 

Looking out for the above issues will make a massive difference for your business in the long run. Below are a few extra things you can do to keep your business on track. 

  1. Make sure within your business you have a good filing system so it is easy to find invoices and bank statements 
  1. Set aside time each week/month to update and review your financial records 
  1. If you don’t already, find a good accountant and let them have a look at your accounts

Of course, you cannot always prevent these difficulties from arising but keeping an eye on them and making changes where you can is sure to make a huge difference. 

About Lee

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