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

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Outsourced CFO | What Entrepreneurs Should Know About Paying Bills

One more important things that a business owner should get to the habit of doing in their business according to outsourced CFO is paying their bills on time every month. Many business owners believe that delaying paying their bills on time is a regular part of building a successful business. However, not only is this not a good business practice, but it can actually end up putting a business at risk, that may be difficult for an entrepreneur to correct. Therefore, business owners need to ensure that they are paying all of their bills on time regularly, so that they can avoid making bigger mistakes later.

One reason why business owners should get into this habit, is because when entrepreneurs fall behind on their payments, they often do not know what their margin is. When they do not know what their margin is, you do not know how much their making. Therefore, if a business owner is not paying attention to the bills their pain, they often have no idea if their business is profitable or not.

When business owners fall behind on their payments, they also are not able to tell if they have overhead problems in their business or not. However, outsourced CFO says that when business owners pay their bills on a regular basis, if they are having trouble paying one consistently, that can help them identify problem, so that they know if they have to fix it. For example, if they realize that they are having a difficult time paying their overhead, they will be able to identify this early on and fix it before it becomes a huge problem.

Often, overhead problems often mean that business owners need to lay someone off. As uncomfortable as this decision might be says outsourced CFO, delaying making that decision can negatively impact a business owner. Most of the overhead that a business owner will have to be paying for are a bunch of little expenses that do not add up to very much such as utility bills, phone and Internet, office supplies and bank charges. Edmonton administrative staff are the two that represent the largest expenses in their business. A business owner may not be able to change their rent expense very much, typically because business owners are locked into a lease or mortgage. Which leaves administrative staff is the only other option that they can change, so that they can have a more reasonable overhead.

Ultimately, business owners may want to avoid laying off as staff member, but the more ethical choice is for them to lay off one person, and ensure the longevity of their business and their staff. Business owners not able to pay their staff on time, they are not doing the many favours, and it might end up with the business owner trying to pay their staff, that they avoid paying the regular bills, which will negatively impact the business as a whole sooner rather than later.

When business owners get into the good habit of regularly paying bills every month, they will be able to see how much money they are making, and if they are not making ends meet. They can make changes to their spending, or increase their prices as well as generate more revenue, but in order to do that, have to first see what is happening in their business. Paying their business bills on time consistently can help business owners see that.

Outsourced CFO | What Entrepreneurs Should Know About Paying Bills

Business owners may not realize that they are creating a more difficult situation their business if they end up not paying their bills on a regular basis says outsourced CFO. The reason why, is because if business owners are not paying their bills at the end of the month, they may not realize that they are unable to pay all of their bills, which can lead to larger problems down the road. Every month that they are unable to pay all of their bills, they increase the bills for the coming month. But he soon, an entrepreneur will be so far in debts, that it can be very difficult to get out of.

When entrepreneurs are having a difficult time paying all of their bills, they will start to make decisions on which bills the cannot pay, and which bills they cannot pay for. When that happens, outsourced CFO says that business owners may choose to not taxes. When this happens, they are actually creating a bigger problem for themselves because Canada revenue agency is quite ruthless when it comes to collecting taxes that are owed to them. Not only do they have the power to take the money directly out of an entrepreneurs bank account. But Canada revenue agency also has the ability to freeze a business owner’s bank account, making it impossible for them to conduct their business.

Not only is Canada revenue agency very determined to get there taxes. But outsourced CFO says that the penalties that are associated failing to pay taxes on time are huge. Especially when it comes to payroll remittances, because Canada revenue agency sees those as the most serious taxes to not pay. They view source deductions is money being held in trust, and when an entrepreneur does not pay the funds that they already withheld from their staff, they view that is abusing money that is being held in trust. Business owners can expect to be hit with the 20% interest charge on the entire amount that they owe. However business owners need to understand that this interest is charged per day. Therefore, business owners who do not pay taxes on time, can find themselves in more trouble than ever.

When business owners are not able to pay their bills on time, they end up in a situation where they are avoiding paying certain things, which could end up with penalties, and even more debt. Business owners should understand that rather than trying to figure out which debts to pay, they should think of how they are going to increase their margins, and increase the revenue in their business instead. By doing this, they can be more able to avoid problems, and grow their business.