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Business owners may believe that it is not very important or necessary to pay bills on time on a regular basis says outsourced CFO. However, not only is it important, but it can also help business owners understand what they need to do in their business to increase their revenue early on to avoid problems. Therefore, help business owners understand why it is important to pay bills on time can help them understand what they have to do to remain financially viable as business.
One of the first questions that outsourced CFO says that business owners need to know the answer to about paying their bills on time: do business owners who are falling behind on payments often not know their profit margin? This is an extremely important question to know the answer to, because often times, when an entrepreneur falls behind on their payments, they often do not know how much money they are making, and because of that, they do not know what their margins are in their business. A business owner should be able to understand approximately how much money they can make on any customer who walks through the door on average. And when a business owner does not know what their margins are, they do not know if they are making money.
The second question that entrepreneurs should know the answer to according to outsourced CFO is: are entrepreneurs normally thinking growth when they should shrink first? This is extremely important one, because many business owners believe that the answer to their problems are simply adding more jobs, more customers and more sales, when they should instead concentrate on one task at a time that allow them to focus on perfecting that first, so that they can start understand their margins and profit first. Business owners who think that the answer to their financial troubles are scaling up their business, will realize that all are going to do is scale up an unprofitable business.
The third question that entrepreneurs should know the answer to according to outsourced CFO is: do business owners who fall behind on their bill payments often have unsustainable overhead? This is an extremely likely source of a lot of business owners financial troubles. The reason why, is because some overhead is so large, that a business owner may not be able to be financially viable without making changes. The two largest costs of overhead that a business owner will have is the administrative staff in the rent. While business owners typically cannot affect rent until their lease or mortgage is up for renewal, that means affecting their administrative staff, often by delaying one-off would be the answer to helping a business owner have a more sustainable overhead.
Many business owners struggle with understanding what they have to do in their business to help them be more financially viable. However, if they start paying their bills on time every month, they often will be able to learn they need to know to ensure that they will always have enough money in their business to pay all of their buildings.
Business owners may not think that paying bills on time has anything to do with profit margins in their business says outsourced CFO. However this is absolutely the case, when business owners are able to pay their bills on time on a regular basis, they will be more able to understand their profit margins, and learn what they have to do to increase them if they are having problems making ends meet in their business.
There are several questions that business owners should know the answer to, that can help them understand whites important for them to be paying all of their bills on time every month. The first question that business owners should know, is how hard is it to overcome debts if business owner let us the deaths of their business pileup? This is extremely important says outsourced CFO, because many business owners do not understand how important this is. It can be almost impossible to for some business owners to overcome if they have put their debts pileup. If business owners are not paying their bills on a regular basis, they may not realize what the deficit is, and the longer they wait to look at their finances, the more the debts end up cumulating. Since 50% of all entrepreneurs fail, and 29% of those failed entrepreneurs say running out of money was the reason why they failed, business owners who let the debts pileup in their business are creating a situation that can be difficult if not impossible to overcome.
Another question that entrepreneurs should know the answer to according to outsourced CFO is: why is failing to pay taxes and specifically payroll remittances especially bad. This is very important, because many business owners do not realize how steep the penalties are for failing to pay taxes on time. Even for business owners get to the penalty, they should understand that Canada revenue agency is very aggressive in collecting the money that they are owed for taxes. They can either go directly into an entrepreneurs bank account and take the money, or end up freezing the bank account itself. This can make it very difficult if not impossible to continue running a business.
Also, business owners should understand that the penalties associated with failure to pay taxes on time are just as aggressive as Canada revenue agency themselves. In fact, outsourced CFO says that when it comes to people remittances, the penalties are particularly steep, the steepest that Canada revenue agency hands out. Business owners should expect to get a 20% interest charge, but that is every day, that every month or every year. Therefore, when business owners fail to pay taxes on time, they can end up owing so much money to the government, that is impossible to recover from.
Business owners should understand how important it is to start paying all of their bills on time every month. If they do this on a regular basis when they are small, not only will they learn the skills that they need to help them generate more money in their business if they are not making enough. Also, they can do that as they grow, and scale up a financially viable business.
