Larger business tend to have experts on board when it comes to managing finances. From accountants to bookkeepers and hiring auditing professionals, they are well able to manage.
We have compiled a couple of tips for your small business.
1. Get rid of credit. If you have been giving credit to your customers, then stop! Customers do not have a right to credit, it is more of a privilege and can be a huge risk for the company.
2. Bill on time. Don’t wait until the end of the month to bill. Do it daily, if you don’t, you are making the same mistake as many other small business owners. This severely limits the company’s cash flow and ability to fund expansion.
3. Careful accounting tricks. There are many techniques that large corporations use to “manipulate” sales or profits. Here are a few that can be used with the help of excellent accounting advice:
- No provisions for bad debts even though the debts are old and the customers are out of business.
- Recognizing the income of a long-term contract when it is signed rather than when the income will actually be realized.
- Selling fixed assets (property, machines, computers) and recognizing the income as normal sales.
- Changing the depreciation policy.
- Treating some operating costs as investments.