How to Stop Undercutting your Business’ Profitability

Every business loops back to financial management health. Taking care of business is more than just a series of checks on a long list. Small business owners wear many hats that fit every role in the organization. The owner can’t be all things to everybody. Financial management, admittedly one of the most challenging areas of business, sometimes sits on the back shelf until tax season. Let’s look at how concurrent financial management can stop the negative effects of self-inflicted undercuts to your business’ profitability.

Don’t undercut yourself.

As a business owner, you work very hard. We recommend you should pay yourself first. The discipline of paying yourself each month guarantees compensation of time. An incentive to care for you and your family decreases stress and improves your motivation to grow the business.

Without good fiscal habits and a full financial picture, small business owners cannot set a practical salary. In the long run, your personal financial safety net also helps protect the business. Even in small amounts, business owners that pay themselves reflect high levels of commitment to stakeholders.

Understanding your taxes.

Accidental failure to comply with tax laws can affect a small business’ survival. Monthly, quarterly, and yearly budgets must include withholdings for estimated taxes. Tax withholding deposits and filing requires timely attention to details. Delay in filing because of poor record keeping will cause audits and costly penalties.

To ease the IRS burden of proof, online accounting services evaluate your financial picture and customize a financial tax plan. They help you with the responsibilities associated with tax documentation and withholding needs. The foundation of good decision-making is accurate expense and payment data. The answers to your tax related questions are as close as your phone or computer.

Charge the appropriate amount for your services and products.

Owners that don’t keep up-to-date financial records blindly lower their prices to keep a level of safety. Maintaining a lower-than-value pricing strategy will hurt your quality image and drive your customers to competitors.

Once your expenses are within tight control, you can eliminate customer confusion by setting the right expectations of your worth. Good financial measures and metrics avoid pitfalls from attractive pricing.

Find professional financial management services.

If your business does not monitor progress, prepare financial statements, identify sources of income, track deductible expenses, and keep track of your property investment, then you may need a professional financial management team. Real-time cloud-based financial accountants use “best-in-class” software solutions, like Sage Intacct, to get your business on pace for financial health through customization of your financial goals and unique needs. 

Contact the financial experts at Heal Accounting to answer your questions about appropriate pricing and financial management.