If you’re in charge of a forward-thinking, future-focused business, it’s still probably the case that you’ve made some errors from time to time. After all, nobody’s perfect – and making mistakes is often how you learn and improve. But there are some areas of running a business which should always be error-free no matter what – and the company’s financial health is one of them. This article will look at some of the most common financial errors made by British businesses – and how you can avoid them.
One of the biggest financial errors many companies make lies in missing the deadlines for their important document submissions. Missing a deadline for a tax return, a company accounts submission or other important document can incur a fine – so even if it seems like a drag on resources right now to get it done, that’s nothing compared to what you may have to pay later if you miss it.
Many companies take on debt at some point during their life cycles, and it’s in some ways an important part of boosting cash flow. But one common mistake is to take out a loan without any realistic prospect of paying it back, and essentially bet that the investment will pay off. Remember, it’s always better to take out a smaller loan and grow slowly rather than take out a large one and risk not ever being able to pay it back. As well as managing your company’s debt commitments in a savvy way, it’s also important to check for any compensation you may be entitled to as a result of the mis-selling scandals of the last few years. At ppi-claim.co you can get specialist help with this sort of claim, so it’s worth checking out.
Pricing too low
When it comes to pricing, it’s often thought that the main danger lies in pricing your products or services too high. However, an equally dangerous financial mistake lies in pricing yourself too low. The problem with doing that is twofold: firstly, it sends a negative message to those clients who consider low fees to be a sign of low quality, and it may even put them off working with you. In addition, it makes it much harder to raise your prices further down the line – and even if you do successfully get a fee rise from a client, a low original fee may mean you limit your growth if it’s a long time until the next negotiation.
Running a business comes with its trials and tribulations – and there’s nothing to be ashamed of if you make a mistake from time to time. But one area where you need to be on your guard against errors is when it comes to the firm’s finances. Whether it’s ensuring that you get your accounts in on time or making sure that you enter a market at a price that’s sustainable and which won’t limit your growth potential, it’s definitely worth taking the time to get this right.