Does your business have a great product with customers that want to buy it, but still struggles financially? How could this be? Without knowing what situation you are in, we guess that your financial management and prowess are lacking. You can have everything going right for your business, but poor financial planning and decisions can negate all of it. Here are some tips to help your business prosper financially.
The Right Amount of Debt
When people hear the word “debt,” they commonly think of it as a bad thing. While too much debt can be devastating to a business, successful companies all carry some level of debt. Knowing how much debt you should have can be the tricky part, however. If you determine that you have too much debt or not enough debt, our team can help. We will help analyze your unique situation and create a plan that will help you achieve a more favorable financial position. Possible solutions may include a loan workout or loan modification. We help you determine the benefits and potential risks of different types of debt so you can make an informed decision.
Strong Accounts Receivable Turnover Ratio
Having a high receivables turnover ratio can mean a couple of things, but mainly indicates that your business is successful at collecting money that your customers owe you. It means that you have a high proportion of quality customers that pay their debts on time. On the other hand, a low receivables turnover ratio may be due to your business having a poor collection process, uncreditworthy customers, or a bad credit policy in place. Collecting on your receivables is a crucial part of helping your business prosper financially. Collecting on the money that your business is owed allows you to put that money back into the growth of the business, pay your employees, and buy inventory.
The accounts receivable turnover ratio is calculated by dividing your net credit sales for the period by the average accounts receivable during the same period.
Collecting on your debts can be a sensitive subject and tricky task, however. You need the money you are owed, but you most likely want to keep the strong customer relationship that you have in place. The experienced attorneys at Hoegen & Associates are very skilled in matters involving debt collection, repossession, replevin, and garnishment. Allow us to work tirelessly to get you the money you are owed.
Save in Taxes
Paying too much in taxes can be hurting your bottom line. While budgeting for tax payments is necessary and required, many businesses don’t take advantage of many different tax breaks available to them. Some of the most commonly overlooked tax breaks by small business owners are:
- Deducting meal expenses if eating with business partners and employees while conducting business operations.
- Deducting personal cell phone costs as a business expense if you use your phone for business calls as well.
- Claim health insurance premiums that you pay out of pocket and without tax breaks or subsidies as an income tax deduction.
- Managing your taxable income so that you end up in a more favorable tax bracket.
From forecasting future cash flows and expenses to maintaining accurate and detailed bookkeeping records, organization can be the difference-maker in financial prosperity. By keeping detailed accounting records, you may find money-saving opportunities. For example, you may find that you are spending far too much money on marketing or advertising, and the threshold for its positive net return has been exceeded. By knowing this, you can save money by reducing your investment and putting that money towards something else. Perhaps you notice that you have more liabilities than you desired and would like to restructure some of your debt.
The team at Hoegen & Associates have helped businesses and entrepreneurs for decades with securing loans that will be beneficial for your business and restructuring debt obligations. We help reduce your tax obligations, so you can save money for what matters most — ensuring your business’s success.
Call Hoegen & Associates, P.C. 570-820-3332 to schedule a free initial consultation. We look forward to working with you!