Technology is shaping business, making it so convenient for small business owners to go online with their business. Today, business apps have made it easy for small businesses to flourish. For example, a business app like Vyapar is quite popular among Indian entrepreneurs in finance, like GST billing, estimation, expense, inventory, invoice creation, and accounting.
If you own a small business, you should take your business to a new level with online business apps like HDFC Smart Hub, Paytm for Business, and Phonepe Business. These apps increase your audience reach with an online business presence and make payments easier.
For better financial operations like real-time transactions and to keep a better track of payments, use the PhonePe business app.
Let’s look at the main financial issues small businesses are currently facing.
Not enough cash flow
Maintaining cash flow or, more importantly, maintaining a consistent cash flow is crucial. If you slip up here, then there are chances that you might have to wind up your venture. In basic terms, cash flow entails balancing accounts payable and receivable. It is the most reliable indicator of the business’s financial health. Inconsistent or limited cash flow is the number one reason businesses fail. To solve this issue, you need to manage your account receivables better, review your cash flow statements, manage the inventory, etc. Always limit the number of clients you offer credit to and change the credit terms to have more cash flow. Good cash flow is essential for the smooth running of the business.
Lack of capital
For the success of a business, it is important to have a good cash flow, but equally important is to have working capital and not take an overdraft now and then. Although many companies are fortunate enough to have angel investors willing to fund operations, most business owners begin their ventures with savings, bank loans, and credit cards. If you approach lenders for additional funding, be aware of your business credit score. According to research, people who are more aware of their business credit scores have a 41 percent higher chance of getting a loan approved.
Poor tax and government compliance
Managing cash flow and working capital is handful enough. Don’t complicate things more by neglecting the tax duties. As a small business owner, you are accountable for many different taxes. You must pay taxes on profits made for the year, regardless of whether you are a sole proprietor, partnership, or corporation. When it comes to the IRS, many tend to overpay, and many underpay and go into the scrutiny of the IRS. Today, with automation, the ATO is getting smarter, and it follows up with the small businesses that are not paying their taxes diligently. If you don’t pay the taxes on time, the IRS will impose a fine on you; the same holds for unpaid local or state taxes.
To better care of your finances in business, use a business app and see how your business flourishes.
Managing these challenges is not easy, but if you manage them well, you will be successful in no time.