Outsourced CFO | The Hidden Costs Of Paying Bills Late
Business owners need to understand how important it is to pay their bills on time every month says outsourced CFO. Not only is it an important way that they ensure that they are making money in their business. But also, because it is an ethical way to run a business, and failure to run a business ethically, will end up costing a business owner more in the long run.
Ultimately the first thing that business owners need to realize, is that if they are not paying their bills on time every month, they ultimately do not know if they are profiting in their business every month. When they delay in paying their bills, they are failing to understand if their making enough money every month to cover those bills. However, when business owners get into the habit one their business is small says outsourced CFO, it can help them learn their profit margin. Therefore, when business owners learn if they have made enough money in that month to pay bills, that they are profiting, and if not, it can help teach a business owner that they will either have to go out and generate more revenue in their business, or cut expenses. By learning how to do this early on, can help ensure that a business owner knows all of the important skills that they have to do to continue to be profitable in their business.
Business owners should also realize that if they do not have a profitable business when they are small, when they scale up their business, they are simply scaling up the problem of not being able to pay their bills. Outsourced CFO says that business owners often believe that they will be able to fix their cashable problem if they’s just get more jobs and more customers, when this is not necessarily the case. They need to ensure that they are able to be profitable small, and that they know what changes they need to make in order to be profitable, whether they have to cut expenses, or generate more revenue, can help them learn to do that on a larger scale when they grow their business. Simply by scaling up an unsuccessful business, will continue to make that business unsuccessful.
Business owners also need to understand that if they are behind on their bills, they have annoyed Dia if they have unsustainable overhead says outsourced CFO. Often, when business owners have unsustainable overhead, they could literally double sales, and cut their overhead in half, and still not be profitable. But because they are not paying their business bills on time, they never get to this understanding. Therefore, when business owners get in the habit of paying their bills on time every month, they will see which bills are the most unreasonable, and they will be able to make the decisions on what they have to do to make them more profitable.
Ultimately, business owners need to realize that paying bills on time can help ensure that they know what to do to be profitable, and once they learn this in their business, they will be able to scale up their business, and continue to be successful.
Outsourced CFO | The Hidden Costs Of Paying Bills Late
Business owners they not realize how paying bills late can actually effect their business in more ways than just having bills pile up says outsourced CFO. It is actually ensuring that they are putting their business ethically, and ensuring that they can have a great relationship with their suppliers and their customers. However, business owners who do not pay their bills on time may never realize this.
Ultimately, business owner who is not able to pay their bills regularly every month, may end up having unsustainable overhead. And when they do not realize this, they will not know how to make their business profitable. However, outsourced CFO says that it can be very important to learn, because in unsustainable overhead typically means that they should lay someone off. The reason why, is because overhead includes things like rent, administrative staff, utility bills and Internet and phone bills, office supplies, and bank charges. However, the two most expensive items on that list are the rent and the administrative staff.
Business owners are very powerless to change the overhead when it is rent, because they are typically locked into a lease or mortgage. And if they can make this change, they should but it is least likely to be the option that they can affect changes to says outsourced CFO. Therefore, the only other thing to help make a business more sustainable is by controlling the administrative staff wages. For example, a business owner may be able to cut all of their other expenses like utility bills, office supplies and bank charges and half, or even eliminate them completely, and there still only going to make a difference to 1% of their bottom line. However, by going from to administrative staff to one, can make the difference to the bottom line of the business by fifteen or 20%.
While many business owners want to avoid laying off staff, because they do not want to betray anyone of their people. However, outsourced CFO says that thing one person off is actually the more ethical thing to do for the entire team in the long run. Because when a business owner is unable to pay everything on time, their business is in jeopardy, and if they eventually run out of money in their business and have to shut down, or Canada revenue agency shuts them down, they going to put the entire team at risk instead of laying one person off.
Business owners can significantly impact their business simply by learning how important it is to pay all of their bills on time every month. By learning how to do this, business owners can ensure that they were are always generating enough revenue and profiting enough in their business to pay those bills. And if they are not, they will be able to quite easily make changes in their business to ensure that they can pay those bills. If business owners do not get into the habit of doing this, they will never know how to affect changes in their business to become successful.