How To Adapt Your Company Finances As Your Business Grows

Starting a small or medium-sized business can be an excellent way to turn your passion into profit. If you solve a problem for customers with an innovative product or service offering, you can generate revenue and eventually break even and make a profit. You may even employ people to work in your business, providing jobs and professional opportunities for others in your industry network. As your business grows, you need to adapt, whether it be in the form of ordering more stock from your suppliers, investing in plant or other equipment to scale up your efforts, or expanding your workforce.

One aspect of your business that you’ll likely need to adapt during growth periods is your finances. You must still pay your bills, suppliers, staff wages, and other expenses while scaling up your enterprise. But if you're relying on yesterday's financial management strategies to pay for today's growth, that's an issue you’ll need to rectify. 

This helpful article will share how you can adapt your company finances as your business grows. Read on to learn more.

Take out a Business Credit Card

Consider comparing credit cards when it comes time to choose a business credit card. A business credit card is a line of credit linked to a Visa, Mastercard, or AMEX card provider that will enable you to make purchases directly for your business. You can use it to bill direct debits, buy equipment, and process all other expenses associated with generating revenue for your enterprise. 

The good thing about a line of credit is that you can use it immediately instead of waiting for revenue to come in. For instance, if you get paid via invoices, you usually set payment terms of 7-30 days. That's a week to a month without income from that source. With a business credit card, you can make the necessary purchases and pay them off when the invoice is paid without incurring interest fees. If you're diligent about this, you can have all the advantages of a line of credit without the negatives, such as interest fees. 

Another reason to get a company credit card is to access exclusive rewards programs. Some credit cards offer reward points that can be used to purchase flight tickets amongst other premium purchase items. You may even be able to redeem accrued card rewards points for cash back or gift cards to select retailers. And if you're making purchases anyway, why not get a little extra value with every dollar you spend by accruing these high-value card rewards points?

Consider Outsourcing Payroll

Paying your employees can be a time-consuming and often even confusing task for business owners. This is because you need to pay your staff accurately, factoring in the hours worked, keeping track of accrued leave entitlements, and paying towards pay-as-you-go tax and superannuation. 

It's easy to slip up and make a mistake when processing pay, and nothing will upset your team like not being paid their correct salary or wages. These mistakes can be a headache and even cost you otherwise loyal staff or perhaps even lead to legal repercussions if your business is reported. 

By outsourcing your payroll system to a third-party company, however, you can relax, knowing that this task is in the hands of a dedicated team of professionals who will manage all the complexity for you. 

That allows you to spend your valuable working hours focusing on what matters most for your business – strategic decision-making, marketing and campaign development, chasing leads and sales, generating quotes, and the myriad of other factors that help you create revenue for your business. 

Review Your Business Premises

A significant outgoing expense for most small businesses is commercial rent for their office, warehouses, or other premises. Commercial real estate is always expensive and can significantly drain your company's coffers. 

As you grow, it's worth considering if your current premises are fit for your business needs. For instance, you can reduce real estate costs if you move your office further outwards towards the urban fringe of your city where rent is cheaper. Or, if you have a hybrid workforce with staff working from home sometimes and don't require ample office space, you could downsize your office and save money on renting a smaller space.

More often than not, however, a large business premise is an overhead cost that you can actually live without. So downsize conscientiously and see just how much you can save in the process.

Lease Your Vehicles and Equipment

Speaking of reducing overhead costs, as your small business grows, you'll often need to invest in new equipment and vehicles, depending on your product or service offering. One way to manage this outgoing cost is to lease these assets instead of buying them outright or financing them with a business loan with high-interest rates. 

With smaller, regular payments on a lease rather than a large lump sum upfront, you can effectively manage your outgoing costs and keep some cash in reserve. Other advantages of leasing include always getting the latest equipment. The maintenance and servicing, tires, insurance, and registration costs are also often bundled into your agreement when leasing vehicles. The company you’re leasing from can manage repairs when required, so you also eradicate the stress of having to find reputable mechanics or technicians. 

The great thing about this strategy is that your leasing costs are typically tax-deductible too, reducing your business income tax for the financial year. 

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This helpful article has shared how you can adapt your company's finances as your business 

grows. Be sure to keep these handy tips in mind when assessing your company’s financial habits and adapting your business to accommodate future growth.