Financial Problems SMB Owners Need to Address

As an SMB, you also have to deal with competition from other businesses trying to acquire your market share. But alongside, you also need to have a tight rein on your finances. Here are some financial issues you need to address and be aware of at all times.

Tax Compliance

Almost 85% of small businesses overpay income taxes every year. While that’s alarming, if you’ve ever had the displeasure of parsing through tax law, it’s not surprising. Tax law is beyond complicated, and it’s also frequently changing. Moreover, tax law is also impacted by other laws, such as labor laws.

This makes keeping up-to-date nigh impossible. Fortunately, there are solutions available to handle this burden. You can outsource handling taxes to accountants who can assist with tax compliance and planning.

Cash Flow

The inability to generate sufficient cash flow is the cause of approximately 82% of small business failures. Almost all firms compete by cutting costs and underselling. However, cutting costs requires reinvesting in a business, which requires generating sufficient positive cash flows.

Even if you’re not reinvesting, positive cash flows are critical supports for your operations. Ensuring that your finances are handled by skilled accountants can help reveal how you can cut costs and enhance revenues.

Raising Capital

Related to the issue of cash flows is having sufficient capital to grow. Having sufficiently large cash reserves is crucial to keeping a business afloat, but they’re not the only variable in the equation. Loans are another source of capital, while maintaining your consumer base is vital to making profits. You can make this process easier by keeping your finances organized and developing a plan. This will give you a list of options, as well as their risks and benefits, for raising capital.

If you are a small business struggling with tax compliance and other accounting issues, get in touch with us, at Harmon/Harmon. We’re one of the CPA firms specializing in real estate operating in Austin, TX, that works with small businesses to assist them with tax planning and compliance. Get in touch to get your small business off the ground.