As a small business owner, you wear many hats to ensure your company runs smoothly. You’re responsible for providing effective marketing campaigns, creating business plans, and developing ways to keep the brand competitive and profitable.
Regardless of the number of roles you play, managing the company’s finances remains the most challenging. Unfortunately, small businesses may not be able to recover as quickly as larger corporations in the face of financial setbacks.
With this, it’s critical for a business owner like you to understand the financial mistakes that may jeopardize your company. If you want to learn more about how a financial service virtual assistant can help your business avoid these money mistakes, you’ve come to the right place!
10 Financial Mistakes Your VA Can Help Your Business Avoid
Financial mistakes can be disastrous for a small business trying to maintain consistent revenue, especially in today’s challenging and competitive economy. Below are some of the most common financial mistakes you can avoid with the help of a virtual assistant.
1. Mixing business and personal finances
Mixing your business and personal finances can cause issues balancing accounts and calculating profits. As such, it’s advisable to create a separate bank account for your company for clearer records of business transactions and more protected resources.
Not drawing the line between business and personal finances makes it very difficult to gauge the financial status of your business. With the help of a VA, you can better assess the financial health of your business through accounting reports on your company’s bank account.
2. Having an inconsistent cash flow
Cash flow is the money that enters and exits a business over time. It assists you in identifying profitable areas of the company and determining if it’s time to expand. Without a consistent cash flow, you risk losing out on opportunities because you lack the liquidity to invest in the necessary upgrades.
A financial VA helps you understand where your money is coming and going. They also create a cash flow analysis to determine how much your business has generated or used in each accounting period.
3. Having poor tax and government compliance
Ignoring taxes is a major financial mistake that can snowball and harm your business in the long run. When filing tax forms, accurate reporting is critical. Otherwise, the company may face fines and other penalties.
One of your primary responsibilities as an entrepreneur is to ensure that all paperwork is filed on time. A financial VA helps you save time during tax season and streamline your paperwork, as you can give them accounting assistance tasks, making tax filing as simple as any other business process.
4. Ignoring the budget
Budgeting allows for adequate resource allocation and ensures that the business earns more and spends less. Without a budget, you may forget to account for miscellaneous expenses in your operations, such as insurance payments and future tax obligations, which can be crucial to your company.
A financial VA assists you in regularly updating your budget to reflect current circumstances in the business.
5. Not using financial tools
Manual tracking of your finances lacks the analytical features necessary to make informed business decisions. Modern financial tools have improved the accuracy of data analysis and projections, allowing you to understand your company’s performance easier.
Accounting trends like cloud computing are now more accessible, cost-effective, and scalable. An experienced accounting VA helps you navigate cloud-based software for your company’s finance functions.
6. Losing track of expenses
With all the costs associated with running a business, spending can quickly spiral out of control. Hiring a professional to track your company’s expenses will keep your records accurate and your costs as necessary.
A VA assists you in monitoring your company’s expenditures and making adjustments to ensure that you stay within your budget.
7. Not having an emergency fund
There will be times when you incur unexpected expenses, and having cash reserves can help keep your business running. If you don’t have the money to deal with emergencies, you might be tempted to take out a high-interest loan that can hurt your business more.
Employ a VA to determine the reduction of your company’s costs and redirect them to emergency funding. Use this assessment to ensure that your budget and capital are only spent on things critical to your operations.
8. Incurring too much debt
While using credit cards is convenient, it can put your business in debt if you can’t manage payments properly. Missed due dates may increase your loan interest rates in the future and cost your business more money.
Bookkeeping is one of the skills financial services VA possess that helps you keep track of your recurring dues to ensure you pay them on time. Doing so enables you to maintain a good credit score.
9. Forgetting unpaid invoices
Several studies have found that 64% of small businesses have unpaid invoices for up to 60 days. A company must keep a close eye on the money coming in to have enough to cover its expenses.
A VA also handles your invoicing procedures, such as sending invoices to clients and ensuring they get paid on time. They monitor and follow up on unpaid invoices and bills to avoid financial setbacks.
10. Not opting for professional financial services
Keeping detailed records of all income and expenses lets you know where your money is going. As a business owner, you must prioritize hiring the right professionals to achieve an efficiency that would be challenging to accomplish on your own.
Professional services keep your finances in tip-top shape all year long and ensure the accuracy of your reports and statements. Outsource Access offer virtual assistance from professionals that can provide financial services to your expanding business.
Manage Your Money Better
Proper financial management is a critical component in paving a company’s success. With many factors to consider when running a business, financial mistakes are easily overlooked. Fortunately, technological advancements have made financial management more accessible, with various accounting and bookkeeping tools available online.
Getting outsourced financial services allows you to save money and invest in other pressing aspects of your business. Collaborate with experts from anywhere in the world through outsourcing.
Outsource Access provides virtual assistant services from highly skilled financial VAs that help businesses avoid financial mistakes and ensure continuous growth. Check out our outsourcing process, or book a call today to learn more!
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