My business is losing money!
My business is losing money!
Do you feel like you are working all week and when you look at your bank account it is almost empty? Do you feel like your business is losing money but you can quite put your finger on where or how?
Is your business losing money like a leaky bucket?
You are probably not alone and that there is something that is not quite right with the way that you are managing your finances and your company.
Unless you get a grip on your finances you will be more than likely losing money like a leaky bucket. All the hard work that you are putting in is going to waste because you are not seeing the benefit for it. You don’t know what you are owed by your customer and what you are spending each month on staff, bills and taxes.
If you are making any money, it is by chance rather than design. You need to find out the reason for this and get a grip on your finances and get a better structure in place to manage them.
Are you getting paid for all your work?
One of the ways that your business will leak money is by not getting paid for all the work that you do. Are there last-minute changes that get requested by the customer or extra work that they need that is simply going without being billed?
This can happen without you realising this and that the customer may approach your staff with these changes and you simply are not aware of any extra work being done.
You may not have a way to check this and without realising it you are being deprived of income that you don’t even realise is due. This is the thing with waste, it happens and you more than likely will not be aware of it. Work is not invoiced because you are not aware that it has been done or the requirements of the customer has changed.
The first thing you need to be able to do is to record the work that you are doing and also compare that work to the contract or agreement that you have with the customer. Anything out of scope needs to be billed. This might seem petty but if you don’t charge for the work, how will the customer value what you do? You don’t get anything worthwhile for free, so why give away your work for free.
You then need to make sure that this is invoiced and billed by your finance team, that they know what they have to invoice and to whom.
This is important and needs to be done every day and every week.
Do you know why you have all your expenses?
Are you looking at your bank account and you don’t know why expenses are coining out? Over a sustained period of time a business will acquire expenses.
These may be software expenses that you had and just forgot to cancel or that you no longer need. Each month these are getting paid out of your bank account reducing the money that is left for you.
At some point you will need to do an audit of these expenses and sit down and really think about what you need and what you don’t.
These expenses that have been acquired over a period of time will need to be stopped and you need to know what expenses that you have and if they are still needed. This kind of waste will just continue to drain the money from your bank account over a long period of time unless you get a grip on them.
If you don’t do this all the hard work that you are putting in is just being wasted on things that you don’t use or don’t need..
Do you have any way to check all of these?
Do have any way to check if your business is losing money?
This will need in depth information on your finances, your staff and your processes.
You need to understand how you are currently recording the work that you are doing and how you charge for this work. Do you have a process in place, is there dedicated staff to make sure that you are getting paid for all of your work and that you are recording and invoicing it all?
Are you aware of the expenses that you are paying each month? Do you know what these expenses are for? These may be expenses and subscriptions that have been going on for years and if they are not needed they should be cancelled.
To do all of this you need to have detailed financial information, to know how your staff work and record their time and what systems and processes they use. It involves a major push to be more effective and efficient of managing your business.
Your only way to realistically do this is to get outside help from your virtual finance team who can help you put all this information together.
How can I keep all more money?
Trying to understand the finances of your business and to mange them in way that makes sure that you are not wasting the money that you have and are getting paid for all of your work will require the knowledge, skills and expertise that you don’t have in your business.
It requires the help of a finance team to make sure that you are invoicing for all the work that you do, to understand the expenses that you are making and help you decide if you can do without them.
You will need a finance team to help you set up the processes to record the work that you do and compare to the agreement that you have with the customer to make sure that you are not doing work that is not paid for. If it is they will help you invoice and get paid for this work.
Getting a virtual finance team in to your business is an investment that will help you reap the rewards of a more efficient business where you are not leaking money and that you can see what money you have in the bank account each month clearly.