Looking Up: How Your Small Business Can Benefit by Acting Like a Big One

When-to-hire-an-accountant-in-chicagoWhen it comes to business, one can make the argument that size is everything. As a company expands, it will undoubtedly undergo a metamorphosis that will distinguish itself from it’s freshmen class of competitors. Once this progression occurs, making comparisons between small ventures and the steadily growing giant becomes increasingly difficult because larger companies simply handle their finances differently. While corporations such as Nike utilize a talented cohort of CPAs and specialized audit firms to help manage their balance sheets, a typical small business in Chicago usually only needs a decent accounting firm to run efficiently. At Accounting Solutions Ltd. (773-267-7500) we want to show you how to utilize large company accounting practices to better your finances. You don’t have to be John Rockefeller, or an accountant to understand or make use of these tips. If you are a small business owner in Chicago who wants to improve your finances, then look no further than this list and learn how big companies handle their books.
1.) Credit is a Privilege, not a Foregone Conclusion: Unless your small business is a bank, there are many cases where there is no reason to extend credit to a client. There are also many instance where a client does not expect it. Unless they are a trusted supplier who you don’t mind helping out, there should be no reason why your company isn’t accepting credit cards or other electronic forms of payment. This will consistently help your cash flow and free up time that would normally be spent on collections.
2.) Accounts Payable: While old norms dictated that A/P payments owed to suppliers would be handled within a 30 day time period, today things aren’t that straightforward. Larger businesses rarely satisfy their payables inside 30 days. Take advantage of more fluid payment dates by setting them for shorter, or longer periods, depending on the needs of your business. This way you can handle your cash flow in a more profitable and less stressful fashion.
3.) Shift Shop: Corporations have been re-locating large portions of their businesses to regions of the world that offer fewer tax restrictions for decades. While you may not want to pick up your small business and move it from Chicago to Taiwan, there are certain states, such as Alaska and Texas, where tax burdens are comparatively low. If your company is expanding into new territory, having this knowledge can be invaluable, and is one of many things where we at Accounting Solutions Ltd. (773-267-7500) can assist.
4.) Time Your Credit Payments: If you make full payments on whichever line of credit you may be using within 30 days, then you will be able to ensure a steady flow of needed cash that would otherwise be hampered by credit restrictions. Satisfying your line of credit means that it will be available for emergencies or larger, out of the ordinary, orders.
5.) Watch Those Invoices: When large companies are owed money by their clients, the first thing they do is to make sure that the other party is well aware of the outstanding balance. By doing this, one can more easily establish a cohesive payment plan with set payment dates for your customers. Keeping invoices organized and in plain sight of your customers is a vital practice that ensures you will be able to track incoming cash flows, improving overall company health.
Following a perusal of this article, we definitely don’t expect you to put down everything and instantly transform your business into the next McDonalds. Rather, we would encourage you to follow some of the tips that large companies use in order to follow your own entrepreneurial dreams. With a bit of luck, your company will grow. If you have any questions relating to how you can implement these tips into your business, or would simply like to take part in a free sixty-minute consultation, please give us a call at 773-267-7500.