If you have a rapidly growing business, it’s easy to make money mistakes that can come back to haunt you, sooner or later. Even a small mistake can quickly turn into a major, hair-pulling problem if you don’t address it early on.
The good news? Many of the most common money mistakes can be easily avoided by having visibility into your financials and knowing what to look out for in advance.
Below are five of the most common money mistakes we’ve seen repeatedly, and what you can do to correct them.
5 Common Mistakes to Avoid:
1. Ignoring or avoiding the problem
The biggest problem we see is oftentimes businesses don’t even know they have a problem with their financials. Or at least they won’t admit it until it becomes a huge problem that can’t be ignored anymore.
If you don’t keep accurate, up-to-date financials, then it’s easy to overlook simple errors that can become major problems later on. Don’t ignore the problem and expect it to go away on its own — it won’t.
Perform regular audits of your finances to catch problems early on, so you or your accountant can address them as soon as possible.
2. No internal controls or separation of duties
We’ve seen plenty of situations where the same person who balances the books is also the one signing the checks.
You might think the best solution to keep costs down for your business is to simply handle multiple duties yourself. But taking on too much responsibility isn’t a wise move for your business, especially when it comes to handling money.
Not separating duties internally is a huge problem from the standpoint of maintaining good checks and balances, as well as fraud prevention. It’s a smart move to outsource all financial duties to an expert with no potential conflicts of interest.
3. Not reconciling bank and credit card statements
There’s a tremendous amount of fraud out there. You might be surprised at how much gets overlooked by those who ignore their monthly financial statements.
Reconcile your bank and credit card statements every month. That way, you will find any erroneous or fraudulent charges before they become major problems.
4. Ignoring the balance sheet
Many business owners focus primarily on profit and loss, while completely ignoring their balance sheets.
If your finances are a mess, it’s going to affect your growth over time. Also, you’re not going to find investors who will want to move forward with you. There’s no greater investor-repellent than messy finances.
Keep your financial records balanced regularly or hire someone to take care of this for you.
5. Not having enough resources or qualified help
If you find the right person to outsource your accounting to, that person will give you the information you need to run your business. If you don’t have qualified help, your business will be more vulnerable to mistakes that could really cost you in the long run.
Have the right information when you need it
Basically, avoiding common money mistakes all comes down to having the right information, whenever you need it, and dealing with any problems as quickly as possible.
Our team at FusePhase is dedicated to helping businesses avoid common money mistakes and make smart financial decisions about the future. But we’re often brought in to give the books a little makeover when they get ugly, too. (And we’ve seen a whole lot o’ ugly.)
Do you have some issues with your business’ financials that you’ve been trying to ignore? Don’t wait another day. Reach out to us today to discuss how we can help.