In a world that is all about money, you cannot afford to waste any – especially if you're a small business. Every penny counts when it comes to starting your business, after all.
Don't waste any more time with rookie mistakes. Here are three common ways businesses waste money as well as the solution to keep your business from making them.
1. Bad recruitment
Your qualified employees will waste time, and therefore money, trying to get a bad hire up to speed with the rest of the company. If you hire the first person who comes along – regardless of their competency – your company could be wasting precious money. In fact, a survey published in a Forbes article found that the turnover cost as percentage of an annual salary for just an entry-level worker is 30-50 per cent.
The solution: It's always worth taking the extra time to wait for the perfect candidate to come along. Be sure to thoroughly vet potential employees before they even get to the interview stage to ensure they aren't going to waste time and money.
2. Not paying bills on time
To be perfectly blunt, your company could severely suffer from not paying bills on time. You get black marks on your credit score, incur late payment fees and begin a cycle of overdue debt that can stifle your ability to pay suppliers and staff. Leave a bill too long, and it can turn into a default – which remains a visible black mark on your financial capability for up to five years.
The solution: Pay bills on time, of course. Get a system in place that allows you to keep track of your financial records so you can pay everything on time. Or, better yet, outsource your bookkeeping service to someone who can do the job reliably for you.
3. Failing to harness technology
Technology can save a business' finances. Xero research indicates that 63 per cent of businesses are using services like PayPal, BPAY or mobile systems to recoup unpaid invoices, and finding it is incredibly effective at ensuring steadier cash flow.
However, this leaves 37 per cent who are not harnessing technology to bolster their business. In this case, money not spent is money wasted.
The solution: Look at your digital payment solutions. Anything from sending invoices to securing payments can be done online now, which can save you a great deal of labour and money in the long-term.
If you need help avoiding these amateur mistakes, then talk to us here at Accountants Australia. We're ready to help you with our expert advice and detailed reports on how you can better manage your money.