When you start a business, your priority is how to safeguard the quality of your products and services. But, as time goes, you realize that protecting your business relations is as important as safeguarding your products and services. Your relationship with the bank, suppliers, employees, creditors, and others is vital because, without them, your business will be unable to grow. These three tips will show you how to protect your relationships and how they, in turn, protect your business finances.
1. Protect your liability
In today’s business world, one lawsuit can easily take you out of business. Because of this, insurance must become your business’ best friend. Check all your liabilities and protect your business, so you are not caught off guard. According to Physicians Thrive, amongst the most important insurance covers to have is disability insurance. This policy protects you when employees, delivery people, and others sue your company. You will also need commercial vehicle coverage, professional liability, and property insurance.
Property insurance takes care of your building and office equipment, in case of a fire, theft, vandalism, and smoke damage. Commercial auto insurance, on the other hand, covers company vehicles. In contrast, professional liability insurance takes care of your business in case of improperly rendered services that cause damages to your clients.
2. Safeguard your cash
Despite having electronic payments to transact money such as credit cards, most consumers continue to use hard money. Even consumers who have adopted the use of credit cards will use cash at some point. Unlike electronic payments, cash can disappear without a trace. You also risk being robbed when carrying cash deposits to the banks.
To protect cash, most traders have adopted smart safes. These safes eliminate accounting errors by calculating the cash from the cashier drawer and preparing a bank deposit. Once this process is over, the safe send a signal to the bank that the money is ready for transfer. A specialized vehicle carries the money to make the transfer smooth and seamless.
3. Use creative financial options to reduce debt
Whether it is a startup or an already established business, accruing debt is unavoidable. You will need to borrow funds on various occasions like developing and growing your business. But accumulating large debts can cripple your business. To avoid this, consider other borrowing options. For instance, invoice factoring.
Receivable factoring ensures your business receives cash, so your operations don’t stall as you wait for invoices to clear. You take your invoice to the factoring company, and they give you at least 75% of the invoice amount. You get the balance once your customer pays the invoice, and after the factoring company deducts a factoring fee. Factoring helps you free up the money tied up in account receivables and transfer the risks associated with the receivables to the factoring company. you can think of it as a working capital loan.
Your business’ livelihood is directly tied to its finances; hence, failure to protect its finances will cause the whole business to crumble in your watch.