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Many business owners believe that even if it is difficult to pay bills on time when they are small, that problem can be fixed when they grow says outsourced CFO. However, this is a very dangerous assumption that is actually categorically untrue. Business owners who are unable to have a profitable business when they are small, are simply going to increase the magnitude of their problem when they scale up. Therefore, it is very important that business owners learn how to be profitable when they have a small business, before they scale it up in size at all.
Ultimately, it is very important that entrepreneurs get into the habit of paying all of their bills on time, because when they do not pay their bills on time, they have no way of knowing if they are being profitable or not. And if they are not, they are simply compounding the problem from one month to the next. Ultimately, outsourced CFO says that if entrepreneurs are falling behind every month in their financial obligations, it is only a few months until have dug themselves whole of debt that they are unable to escape from.
Ultimately, when entrepreneurs are not able to pay their bills on time, they stop being able to pay other things very soon after. Such as taxes. Outsourced CFO says that this is extremely dangerous, because failing to pay taxes and specifically payroll remittances is especially bad and dangerous. The penalties for failing to pay taxes on time are so severe, that it typically makes a bad situation far worse, that may be unable to be recovered from. Canada revenue agency is ruthless when it comes to collecting on the money that they are owed, having the power to literally go into entrepreneurs bank account and take the money that they are owed. They can even freeze a bank account, so that business owners are completely powerless to operate their business.
In addition to that, the penalties can be extremely steep, forcing a business owner to pay even more money that they do not even have. For example, payroll remittances carry the steepest penalties of any taxes, says outsourced CFO. Businesses that have not remitted payroll to Canada revenue agency on time will find that in addition to being expected to pay all of the outstanding amount in a very short period of time, they will also be hit with a 20% daily interest charge on the entire amount. That is higher than many high interest credit cards, and having it be accrued daily, is very devastating. It means that if a business owner owes a thousand dollars, it will literally turn into twelve hundred dollars overnight. Therefore, business owners who want to avoid these stiff penalties that are most likely to end in a business owner failing in business, they need to pay their taxes on time.
Business owners can literally earn how to succeed in business by ensuring that they are paying all of their bills on time says outsourced CFO. If they realize that they do not have enough money in their business to pay on time, it gives them the opportunity to figure out how they can fix that, whether its increasing their prices, generating more sales or cutting expenses. By doing this, entrepreneurs can learn how to be profitable in their business, so that they can be successful no matter what size their company is.
Business owners need to understand that it is very important to pay their business bills on time every month says outsourced CFO. If they do not, it may be very difficult for them to understand if their business is profitable or not. If it is profitable, there is literally no reason that a business owner should not be paying their bills on time. However if a business owner is not profitable, by avoiding paying their bills, is delaying a business owner being able to make the changes in their business to become profitable. Therefore, business owners can learn how to be successful simply by ensuring that they pay their bills on time every month.
Ultimately, many entrepreneurs who are her getting behind in paying their bills are often behind because they have unsustainable overhead. Outsourced CFO says that overhead usually consists of things like utility bills, phones and Internet, office supplies, bank charges and rent an administrative staff. However, many entrepreneurs understand that almost all of those things are such a small percentage of their bills every single month. The two exceptions to that rule are administrative staff and rent. These are the two largest expenses that a business owner will have for their overhead, and when a business owner has unsustainable overhead, they need to learn how to cut that quickly.
Unfortunately, outsourced CFO says that business owners know that cutting overhead usually means they had have to change their rent, or they have to change their administrative staff. The problem with rent, is that most entrepreneurs are either locked into a lease or mortgage, and are powerless to change that. Therefore, administrative staff is the next thing that they can actually effect changes to. However, many business owners are reluctant to let one of their administrative staff go, because they do not want to let their staff or team down.
However, business owners need to realize that it is often a far more ethical thing to do to let one person go, and ensure that they are viable for the entire staff, because having a profitable business in the long run, is more beneficial to the team. Therefore, by making the difficult decision to let someone go, they are having a profitable business that is going to serve the rest of their staff well.
Business owners need to realize that the business owner means having to make difficult decisions sometimes says outsourced CFO. However, by paying their business bills on time every month, can help an entrepreneur learn what they need to do to become profitable, so that can minimize the difficult decisions that they have to make, so that they can run a profitable and successful business.
