Many entrepreneurs would rather focus on new ideas and innovations than spend much time thinking about how to protect company finances. Dreaming up new products and services tends to be more fun and exciting than reviewing invoices, legal documents, and security protocols.
However, if you’re serious about maintaining a solid platform for your current and future projects, consistent and adequate attention must be paid. It’s imperative you go above and beyond to safeguard your financial bottom line.
Securing your organization’s monetary standing will provide the fiscal freedom you need to take your business ventures to the next level. Ultimately, protecting company finances will strengthen you in any effort you undertake to maximize your potential as an entrepreneur.
There are three simple guidelines you can use to protect company finances. Dedicating regular time and attention to all three needs should become part of every entrepreneur’s weekly routine.
1. Protect Your Business from Paying Too Much
It’s possible you are being overcharged by some or all of the vendors and suppliers you rely on for basic, day-to-day services.
If you don’t want excessive billing to affect your company’s financial security, it’s imperative you take a regular look at your ongoing outgoing cash flow. Carefully scrutinize the amount of money you’re spending on general services. Compare these costs to similar options in your market, and make sure you are paying a fair price for your utilities.
You might be surprised to find that this is particularly important when it comes to your water bill. As documented by Utility Bidder, overcharging for water is a routine occurrence.
Water is an important and assumed need for every business, for many obvious reasons. Even so, take some time every now and then to review your water contract and compare and contrast it with recent invoices. If you don’t like what you are seeing, you may or may not be able to select another vendor, depending on your location. Whether you have other options or not, it’s always worthwhile to contact your vendor and call any discrepancies to their attention.
Apply this logic and methodology to any other utility. Whether you decide to conduct a review of utilities once a month or once every quarter is up to you. The point is that excessive billing can creep up unnoticed. It’s worth the effort to make sure your invoices are fair.
If utility bills turn out to be accurate, they can point to waste that needs to be addressed. Higher utility bills might point to a need to fix several leaky toilets or add some insulation to your facility. Do what you can to bring down utility costs to help protect company finances.
2. Protect Company Finances from Liability Claims
Accidents and fraudulent liability claims can come out of the blue at any time. One important way you can help protect company finances is to do what you can to protect your company from liability claims. Failing to take precautionary measures in this regard ignores the fact that we live in an increasingly litigious culture.
Should your company or its designees be sued as a result of a workplace incident, the impact on finances could easily be devastating. Many people nowadays file frivolous lawsuits. The hope is to pressure companies to settle out of court with a large cash payment. You might end up with a sizable legal bill. You could even be forced to acquire unwanted debt. This could even happen if your company is 100% exonerated at the end of all proceedings.
A company can go out of business as the result of a lawsuit, whether the suit had any merit or not. Taking out a comprehensive liability insurance policy is a good first step toward protecting company finances. Adhere to the maxim that an ounce of prevention is worth a pound of cure.
There are a few other daily practices that can safeguard your business, your employees, and your cash flow.
• Exercise caution whenever you say or do anything in the public eye.
Emotions can flare up anywhere and at anytime. The wise business owner knows better than to shoot off his or her mouth. Make sure difficult conversations take place with at least three people present. Let every staff member know on day one that they should never speak on behalf of your company (unless that is their role).
• Protect company finances by initiating a relationship with a reputable attorney.
The best time to shop for an attorney is when you don’t desperately need one. Small business owners and entrepreneurs should assume that legal issues will arise as they pursue their dreams. Take time before you open your doors to find an attorney you can trust who specializes in business law.
• Separate your personal assets from your business assets.
Most entrepreneurs don’t start out planning to lose court cases and shutter their businesses, but it happens. Assume something unforeseen will happen. Make sure that your personal assets are not legally tied to your business in any way. You want to protect company finances, yes, but you also need to distinguish them from your own.
• Make sure every contract you sign contains robust liability protection.
Contracts with suppliers should make clear when their liability ends and yours begins. If a truck backs up and damages customer vehicles, is that your fault? It could be if your contract with the vendor is murky. Customers are unlikely to appreciate the various nuances of liability law. They’re far more likely to blame you if they suffer losses while on your property. Keep this in mind as you consider how any vendor will interact with your business, your customers, and property.
3. Invest in Keeping Company Data Secure
This will almost certainly incur additional costs, but investing in data security is one of the best things you can do to protect company finances. Customers enter into a trusting relationship with you whenever they use their credit or debit card, fill out forms, or permit themselves to be monitored on closed-circuit security cameras. The last thing you want is to open their data up to hackers. Settlements are costly, far more so than preventing data breaches with common-sense precautions.
As you consider other ways to protect company finances, keep in mind that you are doing so not to get lost in spreadsheets or contracts. You are simply taking sensible precautions to make sure your current business ventures stay protected and enable you to pursue future endeavors.
