Starting and running a business is an exciting and rewarding journey, but it can be filled with deadly financial troubles if you’re not careful enough.
To prevent the injury from getting serious, managing and forecasting your cash flow health using the Moolamore app is crucial. It is the key to the continuous operation and long-term success of your SME.
In this blog post, we rounded up the top 5 financial pitfalls that can cripple your business. Find out if you are making one of these pitfalls and how to steer clear of them.
Let’s jump into it!
Safeguard Your Business with Moolamore: Top 5 Financial Pitfalls You Can Avoid
1) Excessive Spending / Overspending
Note that what you think is minimal spending here and there actually adds up to a large amount of money, which can quickly strain your finances and send your business into a downward spiral.
Therefore, it’s really critical to utilise a cash flow tool, Moolamore, that enables you to easily monitor your expenses in real-time, helping you curb your spending habits, stay on track with your budget and identify areas where you can make cuts. This will ensure that your business remains financially secure and can continue running and growing into the future.
2) Too Much Inventory
If you have poor stock control or have too much inventory, your SME company will end up with wastage or cash tied up in products gathering dust on a shelf.
The good news is—-you can turn things around if you embrace Moolamore. With this reliable cash flow solution tool, you can gain insights into your inventory levels, and with that, you’ll know when is the best time to purchase new or additional goods or when you have excess stock that needs to be sold off.
3) Sleeping on Late Payments / Outstanding Receivables
Late payments or outstanding receivables are actually one of the primary causes of cash flow issues that spell trouble in your business.
There will be instances when you will run out of funds, making it difficult to meet your essential financial obligations (e.g. paying your suppliers or staff), which can disrupt your core operations and jeopardise your business.
Thankfully there’s a forecasting and cash flow management tool you can always count on! Moolamore will help you build forecasts which will precisely underscore the problem of outstanding receivables and allow you to identify clients who don’t pay their invoices on time. Hence, this lets you devise a better action plan for your payment terms and process that efficiently works for everyone.
4) Forced Growth
While growth is terrific, it can also come with its perils. As a matter of fact, the first visible sign that occurs when your business is trying to expand too quickly is that cash gets tight.
Consider this: when more sales come in, you need more staff to fill the orders. With more staff, you need more equipment, facilities and bigger office space. With more inventory, you need more cash.
How can you cover your expansion costs if you haven’t properly planned for your growth periods?
This is the very reason why you need Moolamore! Before you scale your business up—you must factor in if you’re in a financial position to make it happen. Cash flow projections and scenario planning with Moolamore will empower you to map out your strategy, sort out existing cash flow issues that can aggravate during growth periods and address how labour, product development, accounting and management influence your cash flow. Likewise, you must also guarantee that your forecast accounts for debt payments, indirect expenses and net working capital to accomplish and complete your cash flow method.
5) Unprepared For The Unexpected: No Contingency or Buffer Fund
Without a contingency or buffer fund, your business could be vulnerable to events like natural disasters, economic downturns and unforeseeable market changes.
Therefore, it’s extremely vital that you closely watch your financial health or standing so it will be easier to determine how much cash you need to put aside.
With an intuitive cash flow tool Moolamore, rest assured that your business is well-prepared to tackle any unexpected event that may come your way.
And there you have it! Bear in mind that a healthy cash flow is critical to the longevity and survival of your business. So be cautious of the top 5 financial pitfalls listed in this blog and how you can avoid them through the help of a cutting-edge tool, Moolamore! Thanks for reading!
Stay one step ahead with Moolamore! Simple but loaded with innovative features—-this is a must-have cash flow tool to prevent financial pitfalls from hurting your business. Schedule a demo today!