Do you feel your business is suffering from bad cash flow? Are you waiting for money to come in to pay your invoices? Do you feel like each month you are holding on by a single thread? You are not alone. In a recent study by Optipay, an Australian Business Finance solutions company, they have seen an increase of 25% in businesses utilising their invoice for financing, indicating that many Australian SMEs are struggling with Profit First Cash Flow management strategies to improve their financial situation.
In fact, CreditorWatch also indicates similar concerns, as payment defaults increase, so do business failures. Their research shows if a business has a default registered against it, it has a 20% chance of failure within the following 12 months. This then rises to 42% for two defaults and 62% for three.
Are you concerned about your business’s cash flow? Are you ready to make the change your business desperately needs to combat these external financial pressures? Have you spoken to your bookkeeper or accountant about your concerns? If nothing changes, then nothing will change. You have heard of Albert Einstein’s take on insanity right?
“The definition of ‘insanity’ is doing the same thing over and over again and expecting different results.” – Albert Einstein
What steps are you going to take to improve your financial situation? The first step should be towards Profit First. Heck, we believe in this system so much that we will give access to the first two chapters of the book for FREE. Download it here. At Profit First Accounting we have witnessed and experienced first-hand the benefits this system can provide, not only in business but across personal life aspects as well.
Why are we so passionate about Profit First? Simply put, it works.
We understand that our economic landscape in Australia at the moment is teetering on a knife’s edge. We are living these challenges every day with our clients.
“Multiple interest rate hikes and stubbornly high inflation have forced consumers at all income levels to cut back on spending,” CEO of CreditorWatch Patrick Coghlan said. “We don’t expect a meaningful turnaround in consumer confidence until the impact of at least two rate cuts has been felt, which won’t be until well into 2025.”
This decline in consumer spending is being felt across all markets and industries. Even with the recent tax cuts, it is not likely to make a huge impact on discretionary spending.
Coghlan admits ‘“This trend took some time to flow through to businesses, but is now showing up in the data in the form of increasing late payment rates and rising court actions, as well as increased business failures and insolvencies.”
By implementing money management strategies such as Profit First you can avoid becoming one of these damming statistics.
Profit First is a life-changing financial management methodology. It creates sustainable income and profit through regular and calculated management of your revenue, pricing, and expenses. By regularly allocating your finances to the designated bank accounts, you ensure that your debts are paid, the business owner is paid, expenses are kept under control, tax and GST are accounted for, and most importantly, your business is operating at a profit. Using the allocated bank accounts and understanding your current financial situation and your future targets means that you will consistently see regular growth in your profit account, have ample funds to pay your tax and GST bill on time, see your debts snowball into reduction, and have definite finances for paying your expenses, dues, and yourself. Profit First makes sure that you run your business, instead of your business running you.
Think of Profit First as your bulletproof vest to protect your business in this time of economic uncertainty. If your current accountant or financial team do not understand the benefits that this system can provide, then I implore you to contact us, remember to ask for those FREE CHAPTERS too to get you started!
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Building a profitable business is not an overnight success;
it’s a journey of consistent efforts and strategic financial management. In the world of entrepreneurship, profit isn’t just a destination; it’s a perpetual path.
-Mike Michalowicz
Ready to revolutionise your business's financial approach? Join us on a journey to financial success by embracing the Profit First Methodology. Partner with us now and pave the way for a brighter financial future.
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