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E-Myth – “Why most small businesses don’t work & what to do about it”

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Outsourced CFO | Failure To Pay Bills On Time Usually Signals Bigger Problems

The stop paying them on time, thinking that they will be able to buy themselves more time to pay them says outsourced CFO. Unfortunately, this does not actually work in helping a business owner have more time to pay bills. All it ends up doing, is delaying the inevitable. Instead, business owners should always pay their bills on time, and if they find it difficult, that should occasion that they need to increase the revenue, or eliminate some of their overhead expenses.

Ultimately, business owners will be able to understand profit and margin if they start their bills on time every month. Outsourced CFO says that it can help them understand how much money they have in their business, and when they force themselves to pay their bills on time, they start realizing if they need to increase their margins, sell more, or minimize their overhead expenses.

Many business owners avoid minimizing their overhead expenses, because they typically understand that their greatest overhead that they can make changes to our their administrative staff. However, business owners need to understand that while they may not want to let one staff member down, operating a viable business is important to the rest of the team, and when they are not able to that in the long run, they put their business in jeopardy, and they will end up impacting the rest of their team.

Ultimately, when business owners are able to pay all of their bills on time, it forces them to face the reality of whether they can afford their staff or not. And while business owners are typically going to put sweat equity into their business themselves, and not get paid report, it is not anything that a business owner should ever expect their staff to do. They must expect that if they have staff they have to pay them. Therefore, a business owner needs to understand how long they have to work this way, before they will have enough money to pay people to do the work for them.

In ultimately, one of the most important lessons that a business owner needs to learn early on in their business according to outsourced CFO, is that if they end up delaying payments, because they think it can by them more time, all is going to do is let the debts pileup, which will compound the problem from month-to-month. Therefore, business owners who start delaying payments can end up in a position that is worse off than ever. Since 29% of all businesses fail because they run out of money, this is often how it happens.

Business owners are able to pay all of their bills on a regular basis, they learn what they have to do to ensure that they can continue doing that, is that not only are they avoiding their debts piling up. That they get good at advertising, selling products, and understanding margins early on in their business. As they scale their business up, the skills they learned early on in their business right to help them grow a successful business.

Outsourced CFO | Failure To Pay Bills On Time Usually Signals Bigger Problems

It is very important for entrepreneurs to get into the habit of all of their bills every month with no exceptions says outsourced CFO. When business owners let bills slide, thinking that they will be able to buy more time, but ends up happening is an entrepreneur never gets that additional time, and their bills pileup. Therefore, business owners should learn early on in their business that paying bills on time can help them see if they are making enough money in their business to pay the bills, and what they have to do to fix it.

One inevitability is, if an entrepreneur starts missing ends, it is only a matter of time until they stop paying taxes to Canada revenue agency. Outsourced CFO says that when businesses do this, it can often signal the beginning of the end, because the way that Canada revenue agency will respond can end up crippling the business for good. For example, Canada revenue agency can take money directly out of the business owners bank account. Or, simply freeze it is that a business owner does not have access to it. If an entrepreneur ends up missing a tax payments, or does not pay enough, CRA will react quickly, and demand money immediately.

Payroll remittances are especially bad for business owners to miss says outsourced CFO because this is the single biggest penalty that Canada revenue agency hands out to business owners. Not only will business owners be expected to pay back people remittances that are due immediately, there also be a 20% daily interest charged the entire amount owing. This can be enough of the tea that business owners are not able to pay, and will force them to go to business. Therefore, business owners should get into the habit of paying all of their bills on time, so that they never compound the problem and start missing tax payments.

Ultimately, business owners can affect their business negatively if they stop paying their bills on time. When their staff sees that the business owner is not meeting up to their obligations, it will cause them to stop waiting their obligations as well. This will create a culture that is very destructive to a business. Staff members might start coming in late or leaving early, missing deadlines and giving poor quality customer service. Therefore, business owners need to understand that paying their bills on time is leading by example, and can help build a culture that they can be proud of.

Business owners who pay bills on time every month not only ensure that they are doing all the way things in their business to have enough money to pay all of their bills. But also ensures that they will be able to scale their business up, because when a business is successful small, it can be scaled up and keep the same level of success. When business owners do this, they can sniff accurately increase their chances of not only surviving in business, but succeeding.