As Mladen Djankovich has discussed before, a company’s finances are responsible for keeping it alive, and it needs to have a steady and consistent flow for the business to function and survive. Thus, companies always ensure that their finances are in order.
On that note, here are some important points that Mladen Djankovich believes entrepreneurs must take note of to keep their business finances in top form and ensure that the company credit score remains respectable.
Hire a good accountant: While a lot of business owners know the basics of accounting, that knowledge is not nearly enough, Mladen Djankovich explains. A good accountant not only knows how to fill the books with the proper information, but they are also up-to-date with current tax information and all the processes regarding tax payment, which is very important for a business. A good accountant is also someone who can give sound financial advice when needed.
Update employee’s tasks: There are times when companies seem to be paying for more employees than they need. By regularly updating and evaluating the tasks of employees, companies can avoid over-hiring. Redundancy is one of the causes of added expenses. Keeping the number of employees to what is truly required and maximizing employee potential is a lot lighter on the finances, even if the company provides a raise or incentives to those performing well.
Evaluate small costs: Small cost drivers in a company can be very dangerous. For one, they are hardly noticed, even when business owners get together with their finance departments. But make no mistake about it, small cost drivers can add up in the long run. One of the most effective ways to curb these seemingly harmless expenses is to focus more on them and whether or not they are truly needed for the company to function.
Evaluate big costs: When a company spends a lot of money, it is usually for growth and expansion. If it does not fall into that category, the company has to look closely at it before spending the money. One of the most common mistakes business owners make is to spend on high-end equipment when generic items will do.
Avoid personal expenses: Mladen Djankovich explains that one way to drive a company’s finances to the ground and receive a bad credit score is to use business funding for personal use. Though it has been addressed in past blogs, it bears repeating since many business owners still fall into the hole, whether intentionally or unintentionally.
Mladen Djankovich is an alumnus of the Indiana University, graduating with B.S.B. in Marketing from the Kelley School of Business. With more than a decade of experience in developing global brands and guiding top-tier companies, Mr. Djankovich is a seasoned corporate strategist and marketer.