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One of the first things that business owners need to understand about paying their bills on time says outsourced CFO, is that when they do that, they will be able to see very easily if they are making enough money to meet all of their financial obligations on a regular basis. If they are not, they need to look at what they can do differently in their business to change that. It might be necessary to increase their advertising, or revenue-generating activities. A business owner may have discovered that there advertising campaign is successful, so it would be the perfect time for them to double or triple the amount of money that there putting into it.
A business owner may discover that if they are not able to meet all of their financial obligations on a regular basis, they might simply have to increase their profit margins, by increasing the cost of their products and services by few dollars. by making a small and incremental change here says outsourced CFO, can ensure that a business owner is making more money, that can make their financial obligations easy to pay. However, a business owner would not understand this if they were not paying their bills on a regular basis.
And finally, a business owner may discover that they have unsustainable overhead if they are paying their bills on time every month. Outsourced CFO says that business owners may discover that overhead is the one thing that gives them a challenge every single month, and rather than trying to increase their prices, or increase their revenue-generating activities, an entrepreneur can simply make some quick changes to their overhead, and impact the profitability of their business.
Ultimately, business owners need to understand that if they are not paying their bills on time every month, they not only do not know if they are making ends meet. They also do not know if they are accumulating debt either. It only takes a few months of not making their ends meet for business owner to end up in a pile of debt that might be very difficult or impossible to climb out of. Since 29% of business owners that fail say that running out of money is the reason why, business owners who are unknowingly accumulating debt can fall into this category.
By learning how to pay all of their bills on time, can help an entrepreneur develop the skills that will help them stay viable in business, and learn how to change directions quickly, so that they can ensure that they are always making money in their organization.
Many entrepreneurs may not realize exactly how important it is to pay their bills on time says outsourced CFO. In fact, many entrepreneurs tend to believe that this can be an effective strategy to stall in paying bills, so that they can generate more revenue in their business. However, business owners who believe that they can push off critical payments to buy more time, often end up accumulating their debt so much that it may be difficult for them to recover.
While it is very important for entrepreneurs to understand that they need to generate more revenue, or increase their profit in their business if they are not making their financial ends meet. Business owners need to ensure that they are doing this, along with paying all of their bills on time. If they are not doing this, they may find that they get into habit of pushing off payments, until they have more debt than they can possibly manage.
One scenario that will happen if a business owner is consistently not able to pay their bills on time, as they will end up finding more and more things to avoid paying, and hopes that they cannot pay the original bills that they needed to says outsourced CFO. Business owners who fall into this habit, often believe that skipping paying taxes can help them by enough time. However, this is a very poor business strategy, that can end up costing a business owner their business.
One of the first things that business owners need to understand, is that Canada revenue agency is extremely aggressive in collecting on taxes that they are owed. Therefore, business owners can expect to have their bank account frozen, or simply have the money taken from it by Canada revenue agency if they failed to pay taxes on time or in full.
In addition to that says outsourced CFO, business owners will be hit with penalties that are extremely steep if they are not paying taxes on time. For example, if business owners fail to remit source deductions correctly, in full or on time, in addition to being expected to pay the taxes in full within a very short period of time. Canada revenue agency will also hit entrepreneurs with a 20% interest charge on the entire amount that they owe. All this seems high, business owners need to take into consideration that this particular penalty, the interest will accrue every day. Literally costing a business owner hundreds or thousands overnight.
When business owners are able to understand how crucial it is to pay all of their business bills on time, they will be able to not only help their business remain viable, but avoid making mistakes that can literally a get that situation worse, and cause them to out of business.
