4 Bad Financial Habits That Are Hurting Your Business
Habits are everything. From getting up early to working out and eating healthy, habits are what differentiate successful people from others. The same applies in business – entrepreneurs who have good financial habits tend to make better decisions than those who lack them.
If you have poor financial habits, then your business could be suffering as a result. What's more, is that many business owners aren't even aware of the behaviours that are costing them money and slowing their growth.
Let's take a look at four bad financial habits that could be hurting your business:
#1 - Not Paying Attention to Expenses
One of the biggest killers of small businesses is neglecting to keep track of expenses. This often leads business owners to overspend on unnecessary items, or worse: not having enough money to cover necessary costs. The key to overcoming this habit is creating a budget, and sticking to it.
This will help you identify areas where you're overspending so that you can make the appropriate changes. For example, if your business spends too much on travel expenses, then consider having virtual meetings online instead of in-person whenever possible.
Working with an accountant is a great way to keep you accountable when it comes to your finances. They can help you create a budget, and assist you with making financial decisions on behalf of your business.
Having someone who ensures that things are done correctly is a lifesaver for many small businesses, especially those with little experience in managing their own finances.
#2 Not Claiming All Allowable Expenses
Forgetting to claim all allowable expenses is another area where businesses suffer.
A business is entitled to claim allowable business expenses that are incurred during the course of running the business. Please take care as some business expenses such as business entertainment are not tax allowable.
To ensure nothing is missed, make sure the record-keeping is tip top. Recording every expense is one way of ensuring that you keep your taxes low and pay only what you need to. A good accounting or bookkeeping software will be ideal for keeping a record of all the business expenses.
The more the expenses, the less the tax, meaning more money in your business, so, keep good records and help your business grow.
#3 - A DIY Attitude
Doing everything yourself saves money, right?
Many business owners try to do things by themselves, but this can be a huge waste of time and money. In some cases, you may end up doing more damage than good. This is especially true when it comes to financial matters – unless you're a qualified accountant or bookkeeper, there's no reason for you to handle all the financial tasks for your business.
Hiring a professional to help you with bookkeeping, accounting, and other financial matters can save you a lot of time and money. Not only will you have more time to focus on what you're truly good at, but you'll also have peace of mind knowing that everything is being handled correctly.
#4 - Lax Invoicing and Billing Practices
Another bad financial habit that can hurt your business is lax invoicing and billing practices. This happens when you don't send out invoices in a timely manner, or when you don't follow up on unpaid bills.
Both of these things can lead to money being left on the table, which is obviously not ideal for any business.
To make sure that you don't fall victim to this bad habit, it's a good idea to create an invoicing and billing schedule. This ensures that your bills are sent out on time each month, without fail. It also helps you avoid forgetting about overdue bills, so that you can follow up with clients in a timely manner.
You may want to consider hiring an accountant or bookkeeper to help you with this task, as it's something that can easily be overlooked by busy business owners. A simple mistake like forgetting to send out invoices on time could cost your business thousands of pounds each year – money that could have been spent on paying bills, marketing your business, or hiring new staff.
From My Business to Yours
Make sure to avoid these bad financial habits if you want your business to succeed! Implementing a budget, claiming all business expenses, working with professionals, and sending out invoices on time are all great ways to keep your finances in check. Remember that over time, good habits compound to provide great results!
You're very welcome to get in touch with Grace Certified Accountants if you have any questions. Book a Free Call directly into my diary HERE.
Director & Managing Partner
Grace Certified Accountants
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