Contributed post
One of the most important elements of any business is cash flow. If you do not manage your finances effectively, it could spell the end of your business. One area where a lot of people go wrong is with forecasting the expenses they are going to have to fund. After all, for your financial plan to be successful, it needs to be accurate, and this means including every possible cost. With that being said, let’s take a look at some of the most overlooked business costs you must take into consideration.
- Time – Let’s start with the most challenging cost of them all: time. As they say, time equals money, and this is most definitely the case. The only problem is that it is exceptionally difficult to quantify how much money you are wasting. The only thing we do know is that if you are not operating to high levels of efficiency, you are certain to be wasting time, and this means that your business is leaking money.
- Insurance – A lot of businesses fail to include insurance premiums in their financial plan. Firstly, let’s stress the fact that if you do not have insurance in place, you are only going to cost your company more money in the long run. Nonetheless, you do need to assess your insurance needs, which is something a professional firm like Trusted Choice can assist with. An independent agency will be able to provide you with an objective viewpoint regarding what policies you require and which lender is right for you.
- Payment delays – In some cases, it is impossible to prevent payment delays, however, you need to do all in your power to stop them. This is because every payment delay is going to cost you money if you need to dip into your overdraft as a consequence. This can result in interest fees and charges. To prevent delays, make sure you send your invoices as soon as possible, and have a clear payment policy in place, which should be provided to clients immediately.
- Employee benefits – Employee benefits represent a significant business expense. This includes training, health insurance, personal leave, and medical leave. Of course, a lot of benefits are designed to give your business an edge, for example, by improving retention rates so you can hold onto your best talent. Nonetheless, it’s important to get the balance right and recognise when a benefit is costing you more than what it is making you.
- Equipment maintenance – Finally, while most business owners don’t forget to include equipment in their budget, they often overlook upgrades and maintenance. After all, your equipment is not going to operate at optimal level forever. You’re going to need to spend money on this area of your firm again in the future.
From insurance to payment delays, hopefully, you now have a better understanding regarding some of the most overlooked business expenses. It is vital to factor these costs in when planning your company finances. Failure to do so could result in bigger issues later down the line, especially with regards to cash flow.