Financial Disasters That Could Ruin Your Small Business (And…
Whichever way you look at it, money will play a crucial role in the successful running of your business, but what should you do when you come across a financial problem? Well, knowing how to handle a financial issue ahead of time is the best way of minimising any damage that it may cause. To that end, read on for some advice on how to do just that.
There has been a mistake in staff wages.
Mistakes in staff wages are not good news. They can create problems with motivation and morale, and if they happen on a regular basis, they can also eat away at the trusting and positive relationship that you work so hard to create with your employees.
If at all possible, it is preferable to prevent this issue from happening in the first place. Something that you can do by using suitable payroll software and giving enough time to your accounts team to process and authorise payments in the correct way.
If you do find yourself in a situation where a mistake occurs, it’s better to inform your employees of this rather than letting them find out for themselves. Also, if possible it can help to make a small 0% loans available for those that are struggling to pay their bills until the neck cheque is issued.
Your tax code gets changed.
Tax codes can easily turn into a financial disaster.
Tax codes can cause a raft of financial issues in your business, and if you are not on the right one, you could be paying way too much or way too little tax. Something that can then be hard to reclaim, or you could end up paying back out of future profits!
One way to deal with tax code issue is to spend hours and hours trying to get through to and then on the phone with the HMRC to clarify that you have the correct one.
However, a more straightforward method of dealing with this may be to use an invoicing company that deals directly with the HMRC for you. Then they take on the responsibility of getting this part of things right, as well as even answering your more detailed questions such as what is ir35, and what can I do to avoid being stung by it? After all, haven’t you got enough on your plate already running a small without having to worry about things like tax codes as well?
You get landed with a lawsuit.
Often time when your business has been landed with a lawsuit that you have not been successful in rebuffing, you are left with a hefty bill as well as compensation to pay. Obviously, this is something that can quite easily eat into your profit margins and affect the success of your business in the long term.
Of course, running a tight ship is a good way to shrink the risk of this happening. Although, if it does occur then attempting to negotiate a deal with the court where you don’t have to pay the sum all in one go can be a useful way of making this financial burden less of a disaster.