No business will ever last without sufficient finance. Every business enterprise needs money to cover various financial obligations and to keep it running. Without continuous cash flow, the company will likely encounter severe monetary issues leading into bankruptcy.
But why is it essential to maintain a decent financial reputation? How will the business benefit from it?
For so many reasons, keeping your company’s financial reputation clean and respectable is vitally important. Firstly, companies with good financial records win the trust of many suppliers. Consequently, this will lead to establishing harmonious relationship between your business and your suppliers. Another reason as to why it is vital to have decent record is the fact that business can easily apply for loans. Sometimes, business enterprises will need monetary assistance from financial institutions. Once you have clean background, you are likely to get approved.
And so you might wonder – how you can maintain a good reputation?
Settle Accounts Payable On-Time
As always, paying your financial obligations punctually can bounce back to your business’ reputation. Bills! Bills! Bills! There are several bills you need to pay to keep the workflow in your company smooth. Electric bill, water bill, telephone bill, rental, etc. All of these must be settled on time.
Why? Well obviously, the amount due will be added to your next month’s bill – which means bigger burden. If worse comes to worse, your business will lose the service due to non-payment. Now, that is a big shame to your business. Service providers might decide to stop working with you or include you in their black-list.
Pay Bills in Full
As much as possible, try to settle your business payables in full. Partial payments can trap you into a cycle of incremental obligation. Once you are trapped, escaping from an increasing debt is quite challenging. For instance, if you only pay 50% of your current bill, the remaining 50% will be carried over into your next bill. When that bill arrived, you will pay 50% again and then the balance will be added to the next. See the flow?
If your business is caught in this pitfall, it will surely affect your financial record. Unfavorable feedback will be your number one foe in this situation. Getting negative comments from other establishments might pull you down.
Never Apply for Business Loans Simultaneously
Applying for business loan is unavoidable. If your budget is not enough for a business project, chances are, getting a loan is the most ideal solution. But it does not mean you will apply for loans in quick succession. Take one loan at a time. This way, you will never have a hard time paying what you owe. And you know what it means? High credit score and good reputation.
For instance, you want to expand your business, you can look for financial institution offering business expansion loans. One criteria of getting fast approval in your application is having impressive credit rating, which can be linked to your financial records.
Maintaining a good reputation seems arduous. It demands discipline and hard work. Once you succeed, your business can reap overwhelming benefits.