Owning and running small businesses can be both a blessing and a curse. It is likely what you’ve dreamed of doing for a long time, and it makes you happy and fulfilled, but at the same moment, it can also make you stressed out and anxious. A lot of the anxiety of being a small business owner comes from potential financial issues since they can be enough to break a company. Here are the top financial problems that face small businesses today.
People say there are only two sure things in life, and it’s no lie that one of them is taxes. Understanding your tax liabilities and a skilled and competent tax professional to help you out is vital. It is critical to have proper records, proper accounting, and know when to pay your taxes. Even a small mistake could become a more significant issue if you’re reckless about your business taxes.
Even the best-planned budget can be thrown out the window by an unexpected or emergency expenditure. These unexpected moments often come in the form of a broken, costly piece of equipment, or a tax bill that you didn’t plan for (see above). It is impossible to predict every potential expenditure, so having a cash buffer or insurance is vital to long term survival—both help to minimize your risk of going under because of an unexpected expense.
When cash flow is inconsistent, it can be a huge problem, so figuring out how to maintain consistent cash flow is vital. If you know that certain times of year are slower than others, you need to plan for the less fruitful times with a cash buffer. What you don’t want to have happened is for a month of slow cash flow to throw off your whole year or set you back for many months. Set yourself up for a much higher chance of success by paying off debts as soon as you reasonably can and decreasing your debtor days. You should also invoice right away and make payments easy for your customers or clients. You could also offer payment plans for costlier bills or clients so that your cash flow is more consistent. Finally, make sure that you are planning for your cash flow, not only looking at your profits when forecasting your financial picture.
Contact Bowman & Company Today
Bowman & Company CPA, PC provides all of our individual and small business customers with experienced, accurate, and affordable financial services. Our financial services are aimed at decreasing your taxes and increasing your net worth through responsible, timely, and accurate record keeping. We offer our services to clients throughout the Washington, D.C. metropolitan area including Maryland and Baltimore County, Columbia, and Howard County. For more information on our offerings, contact us online or call us at (410) 381-8121. You can also find us on Twitter, Linkedin, Facebook, and Youtube.