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Essential Advice For Safeguarding Your Business Finances

by Luke Fitzpatrick 2 months ago in advice

You probably don’t need to be told just how critical your business’s finances are to long-term growth.

Photo by XPS on Unsplash

Strong, well-protected finances afford you the ability to reach more people, offer improved services, and ensure that the quality of your products stays consistent.

To remain profitable and make your business the best that it can be, you, therefore, have to put procedures and processes in place to protect your business finances.

You may not think of it as a major priority, but it’s an essential part of running any business, be it a solopreneur start-up or an international corporation.

Essential tips for protecting your business finances

You can do several things to look after your business’s finances and safeguard them against financial threats. Take these tips on board and put them into action to assure smooth and secure business growth that lasts for years to come.

1. Tread carefully with debt

Debt is pretty much inevitable because, no matter what type of business you run, chances are you’ll need to borrow money on several different occasions. In fact, it’s practically impossible for businesses to expand their operations without accruing some sort of debt. However, that’s not to say that you don’t need to concern yourself with yours.

Try to avoid taking on too much debt if there’s no guarantee of payoff and look into more flexible financing options to find the ones that suit your business model.

2. Get good insurance

Stay one step ahead of litigious employees, suppliers, and customers by backing your business up with liability insurance. The likelihood is that one too many bad lawsuits could cripple your company completely. So, whether you think it would happen to you or not, it’s important to prioritize putting good cover in place.

Try to pinpoint the places where something could potentially go wrong in your workplace and then cover your back with the relevant public liability insurance, product liability insurance, or similar.

3. Protect cash payments

Cash might not be king anymore, but it is still in circulation. As such, it will be necessary for you to monitor and adequately safeguard all cash your business handles. This could include implementing procedures that help you to monitor petty cash better. Or, you might need to opt for something a little more heavy-duty.

With cash counting machines and smart safes, you won’t have to worry about bills going missing from cash registers from time to time. This makes cash payments far easier to track and ensures that your tills are never lighter than they should be.

4. Implement KYC procedures

Financial institutions in particular are prime targets for hackers, money launderers, and terrorist financing. As such, it is crucial that so-called ‘know your customer’ or RYC procedures are implemented. Not only will they help to protect the business itself from illicit financial activity, but they also provide an extra layer of security for customers.

KYC means knowing your customers past the basic personal information that gets written down on a form. In other words, it involves in-depth customer verification and identification processes that ensure a customer is who they say they are.

5. Protect your data

Data is becoming increasingly important to businesses of all types and it’s not hard to see why. Companies that lead with a data-first approach can improve customer experience and increase ROI. But, data needs to be handled with care. Otherwise, your business could be at risk of leaking important credit card information and losing consumer trust as a result.

With high-level encryption, two-step authentication, and other security protocols, you can make a data breach far less likely. However, if one does occur, it’s important to have a strategy in place that will minimize damage to your company’s reputation.

Protecting business finances far into the future

By being proactive and implementing protocols that protect your business’s finances, you can improve its prospects and help guarantee long-term success.

Far from simply giving you the tools to hold down money, adequate business finance protection allows for exponential growth, increased income, and improved customer satisfaction. Altogether, they provide the ingredients for a profitable, long-lasting business.

advice

Luke Fitzpatrick

Luke Fitzpatrick has been published in Forbes, The Next Web, and Influencive. He is a guest lecturer at the University of Sydney, lecturing in Cross-Cultural Management and the Pre-MBA Program. Connect with him on LinkedIn.

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