To err is human and it is very likely that a manager, throughout his career, make some mistakes. However, there are financial mistakes that can be very detrimental to running a business and can even lead a business to failure. In today’s article we address the 7 financial mistakes that hurt your business!
Lack of constant analysis
It is essential these days to continuously analyze your business, because only then can you find problems before they materialize. Managers can no longer survive just with Excel sheets and reports with a few days. It is essential that the business is analyzed at the minute, because only in this way will be able to be always ahead of the competition. Business monitoring software like Multipeers is a growing need in today’s business because it allows you to analyze in a simple way everything that is happening now with your business.
Spend what you (still) don’t have
Hiring a debt with money that has not yet gone into the box is a very common mistake and should be avoided to the fullest. There is no guarantee that the customer will not be late in paying or if an unforeseen event will happen and you will need to invest in something more urgent.
Do not make a balance sheet
As companies grow, various investments are made and the company’s assets are growing over time. However, there is often no concern about knowing what one possesses at a given moment, eventually continuing to invest in disorderly ways. Having knowledge of the balance sheet helps the company whether it needs to continue to invest or whether, on the contrary, it should reduce its investments.
Lack of automation
Performing tasks manually that could be automated is a very common mistake. Using an ERP helps you optimize all processes, reducing costs and increasing productivity by reducing human error. The information of a company must be integrated, so that all the data is updated so that it is easier to make decisions.
Do not have KPIs
The financial area is one of the most relevant in any business and the use of indicators becomes essential. Using business metrics enables you to measure the outcome and verify that the stated goals are being met. Working without indicators is like being lost in a complex labyrinth without a map to guide you.
Mixing personal expenses with company expenses
It is a very common mistake among business owners, who usually use the company account to pay for personal expenses. This mistake is very detrimental to business as it completely changes the fixed costs of the organization and distorts its financial reality.
Focus only on sales
Sales are the ultimate goal of every business, but if you don’t pay attention to the other areas of the business, you may compromise your entire business. Administrative and human resource management are examples of areas that deserve to be treated with care. Good management of all departments of a company will reflect the financial results in the medium and long term.