The economy is tough right now; unfortunately, many businesses are starting to feel the pinch of the recession. The question is, is your business recession-proofed? If not, it’s important to make sure that you have the right kind of plans and protections in place to safeguard your business and your employees. The best way to do this is adding a professional bookkeeper to your team. A good bookkeeper will help you manage your finances and ensure that your business is running efficiently.
Up-to-date and accurate records are necessary for informed decision-making. Especially when decisions could have significant implications on the survival of a business. A professional bookkeeper will work as your guide through a recession. They will help you identify areas where you can reduce costs and help you create strategies to increase your companies profitability. Below are the main few steps a bookkeeper can take to recession-proof your business.
Budgets and Contingency Plans
With the recession in progress, right now is an important time to revisit budgets and ensure that you have a good plan for the next financial year ahead. A bookkeeper can help you guide you in creating a custom plan that works for your business in the shifting economy. This new budget should take into account all of your business expenses, as well as your income. There should be a breakdown of fixed and flexible expenses to help you identify expenses that have room for adjustments and those that don’t. With rising costs in all industries, any good budget should also include a contingency plan, in case of unexpected expenses. A well planned budget will help you stay on track in the rough times ahead and prevent unexpected changes to derail your business.
Cash Flow Management
A bookkeeper can be a great asset to your business during a recession, especially when it comes to managing cash flow. They will help create a cash flow statement to help you gain an accurate understanding of your current financial situation and identify any potential areas to cut costs. During a recession, they should track your businesses accounts receivable and payable to ensure you are getting paid on time and not overspending. This is especially important if your business has taken out loans, as timely payments are necessary to avoid late fees.
Strategic Business Plan
Finally, your bookkeeper should play a big role in creating a strategic plan to help your business not only survive but continue to grow in the shifting economic state. This plan should include S.M.A.R.T business goals and objectives that will be used as a metric to measure success in the future. They can help you create comprehensive budgets and forecasting models to help you plan for the future and prepare for any potential downturns. This can help you make sure that your business is prepared for any eventuality and is recession-proof.
LedgersOnline’s team of professional bookkeepers can help you prepare for the recession, organize and create plans to guide the difficult decisions you’ll need to make, and ensure that your business is well-positioned to weather any economic storm. With the right kind of protection in place, your business can remain profitable, even during tough times. Schedule a call today and learn how our Canada-based bookkeepers can help you.