Protecting Your Business From a Financial Viewpoint: What Entrepreneurs Need To Know (4 Video Links)

As a legal entity, your business faces significant financial risks. And, running an enterprise without the necessary protection can leave your organization exposed to severe threats, such as accidental violations, data breaches, cash flow issues, and even bankruptcy.

Luckily, with the right strategies in place, you can keep your business safe and profitable. Unsure how to get started? The tips below can help – but don’t forget to partner with a specialized financial advisor and expert accountants. Consult with a licensed attorney, CPA, and insurance agent before making any decisions

Join Conference Room: More content on accounting, personal finance, and humor/ short story topics. Video, blog posts.

Invest in Insurance Coverage

The first and most important layer of protection you should invest in to avoid financial pitfalls is business insurance. According to statistics, around 40% of small business owners have no insurance, while up to 75% of US businesses are underinsured.

However, finding the right insurance cover can help you protect your organization, assets, and teams from accidents and pitfalls, thus allowing you to operate in all safety.

Stay Compliant and Protect Your Business From Fraud

Keeping your business compliant with the local law and regulations is essential to prevent hefty fines and breaches of contract. What’s more, upholding the highest standards in terms of data privacy and cybersecurity can help you keep your business safe from fraud and safe from risks such as data breaches, ransomware, and identity theft.

Track Your Cash Flow

Cash flow issues are one of the most common reasons why small businesses fail, alongside lack of funding, inadequate management, and unsuccessful investments. To track your cash flow, make sure to work with a qualified accountant who can help you understand financial inefficiencies and create an advantageous tax strategy.

Conduct Your Due Diligence and Leverage Trustworthy Resources

Whether it is to invest in new technology or to partner with a third-party provider, it is crucial for you to conduct adequate due diligence before choosing a service or product. For example, if you are looking to take part in a crowdfunding project, resourceful guides can help you understand events such as the DiversyFund lawsuit, choose providers that match your needs and set your expectations correctly.

Working with industry experts and mentors can also help you avoid common financial pitfalls and ensure that you are not investing precious resources in a faulty or underperforming asset.

Build Long-Lasting Relationships With Suppliers

Your suppliers play an integral role in your business’s success, and you should ensure to cultivate long-lasting, trustworthy relationships with them. This can help you obtain high-quality products, take advantage of unique discounts and promotions, and even access more convenient repayment terms.

Don’t forget that relationships should go both ways! Spend time boosting your business’s credit file and prove your creditworthiness!

Keep Your Personal Finances Separate From Your Business’s Finances

Lastly, don’t forget to choose the right business model for your business and ensure that you are keeping your personal finances separate from your business’s ones. This allows you to safeguard your personal assets in the event that your business experiences a setback. On the other hand, poor personal finances should not impact the cash flow and financial health of your enterprise!

If you are unsure how to best protect your business from financial threats, make sure to partner with an experienced financial advisor.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(amazon author page) amazon.com/author/kenboyd

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/