Things That Maybe You Miss In Your Finances | Entrepreneur Finances
28 Mar 6 things that maybe you miss in the calculation of your finances
The issue of finance is often challenging for many entrepreneurs and owners of small or medium businesses, due to the different movements of income and expenses that usually occur on a day to day basis. Therefore, we will tell you the 6 things that are commonly omitted during the calculation process, so that you can have a more accurate figure of the economic resources you manage within your business and make better financial decisions.
Current assets are those that represent the amount that is available to be used or invested. It also includes all the different types of income and assets that can be converted into cash in the short term.
# 1 Accounts receivable
One of the concepts that you must take into account to be able to have a more real calculation of your finances, are accounts receivable. These are identified as part of the payments from customers to whom you already offered your services or products, are current assets. Since it is money that is about to be received in a short term and can be used within the cash flow.
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In the same way, it is necessary that you add the amount you have in your bank accounts, even if you do not use it and you have it saved for some unforeseen event. This also can throw a positive result in the calculation, it will help you to know how much you have saved and set goals to increase it. An example of this can be, to set aside an exact figure for the month and every three months to increase it.
# 3 Inventory
Another aspect that many omit not to perceive as physical money, are the objects that are in inventory. You must consider the total value that these assets represent, since as you sell them, you will be obtaining the money to be able to circulate it. It is good to mention that an excess of inventory can be negative if it represents much higher costs of its value in itself and the value it has in the market.
Short-term liabilities are all those expenses that are held in a fixed manner and must be settled in the shortest time. These include payments for services, the purchase of material, and those outstanding payments that are held.
# 4 Taxes to pay
One of the short-term liabilities that many often forget, are the taxes that must be settled in tax matters. Since a business that is formalized, it must comply with the corresponding tax payments according to the transactions it carries out. Within these expenditures are the VAT (Value Added Tax) and ISR (Income Tax) payments.
# 5 Loan interest
Also in the financial calculation, the interests of the different loans that are possessed must be estimated, either credit cards or credits requested to invest in working capital. The amount that represents the payment of said interest must always be taken into account in order to pay in time and form and thus avoid that this concept increases due to delays.
# 6 Remunerations pending
Finally, remember to identify the exact amount of all the compensation you have pending to your employees. These are an important liability and in addition to the normal payment of the payroll, it must be calculated in order to have a good administration of economic resources and avoid future liquidity problems.
How to improve the state of your finances?
If at the end of your calculation you get a negative number or you want to increase, there are strategies that can help you. For example, in the case of expenditures or expenses, you can begin to implement strategies that help you reduce them. Look for suppliers that offer more competitive prices, use your raw material efficiently or try to reduce the fixed costs of basic services.
To increase your assets, you can devise a new collection plan that is more agile, invest in offering a greater variety of products or even prepare a plan to take the next step and grow your business.
Now that you know how to calculate your finances in a better way, try to take advantage of your resources to increase the value of your business and generate more income.
You can use digital tools, such as Kompás, so that you know in real time the income and expenses that are being invoiced in your business.