Do not forget the accounting of your SME for a healthy growth

Darryl Bachmeier
Apr 1, 2019

The constant activity of a company exposes it to many transformations, in addition to ups and downs similar to those that any person would face. Of course, you will also need some care to be healthy, grow and evolve. Like any living being, sometimes its trajectory can accuse illnesses that are symptoms of illness, and this is where we must be attentive and act in time to return it in good time.

What would we do if our company were a person experiencing health problems? Certainly, the first thing would be to take it to the doctor to examine it and give us a diagnosis so - based on that - determine what the solution is. In the case of organizations, the specialists are the consultants, who define what the strategy to follow so that the institution remains on the rise is. And to make a correct evaluation, the indispensable step is to review the accounting of your SME.

It is necessary to take into consideration that every entity that is on the rise becomes increasingly complex. An emerging entrepreneur has fewer aspects of dealing with and more time to invest in their tasks, which can be divided between the multiple tasks that the organization demands and the control of a small number of employees. However, when the company grows, a greater amount of resources (logistic, human and financial) enters that the entrepreneur will have to manage more and more efficiently. In addition, customers will increase exponentially and will add to their concerns on the task of loyalty.

When perceiving this remarkable increase in its obligations, it is common that the entrepreneur does not spend all the time he would like to negotiate, with suppliers and clients, aspects as relevant as the price lists. You will not be able to monitor the weekly finances or accounting reports of your SME calmly and thoroughly. The problem is that this maelstrom can lead the company to a fatal outcome.

So, what to pay attention to? 1. Worry about receiving a monthly financial statement the first 10 days of each month. It also requires partial reports of logistics and cash flow once a week. Try to take the time to review them or hire a reliable advisor to do so. The essential thing is to be clear about the accounting situation of your SME. 2. Pay invoices on time to suppliers without having to resort to indebtedness, renegotiations or bank discounts. 3. Try that the partners can withdraw profits in certain periods. This will make the company more attractive in the eyes of investors. 4. Maintain an orderly internal accounting, which allows efficient management of clients and suppliers, knowing how much is owed and how much others should pay the institution. 5. Identify and control eventual liquidity problems in time.

It is essential to have visibility in real time regarding all these points, in order to assess the situation of the company correctly and take corrective measures when the case warrants it (or a potential “disease” begins to manifest itself). This will depend on our organization being healthy and on the rise, to continue growing and making a positive profit.

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