The year 2020 was tough on businesses, with various health hazards, legal restrictions, and economic turmoil all contributing to the market’s turbulence.
Many companies ended up going under due to their business models no longer being viable in the short or long term.
Many of the ones that managed to keep their heads above the water are experiencing unprecedented stress.
Being financially savvy is going to be even more important in 2023 than it has ever been. Business owners are going to have to take steps to keep their companies afloat.
Consulting experienced cash flow management professionals such as the London Insolvency practitioners Hudson Weir is a good way to start.
Brushing up on the relevant financial skills is also going to be crucial for weathering the difficulties that the near future has in store for us. With this in mind, here are seven financial skills that would be critical for businesses in the year ahead of us.
Securing Government Funding
COVID-19 restrictions and other pandemic-related difficulties have wrought untold damage to the economy. The government has taken steps to alleviate some of the financial pressure caused by the myriad crises that still plague 2023. Knowing that those programs exist and how to utilize them could mean all the difference right now.
Readiness to take advantage of them could make or break a company – so make sure you have the necessary skills and know-how to do so.
Procuring Debt Funding
Being able to find your way about the banks and finding funding via loans will be another invaluable skill for businesses in 2023. The influx of cash obtained via loans may allow a company breathing room to either get going or to persevere through difficult times.
Taking a loan can be used to boost your cash flow and remove issues relating to salaries and outstanding debt, allowing you to remain solvent until you can reach the light at the end of the tunnel.
Obtaining Equity Funding
One of the ways of resolving cash flow issues is through equity funding. Doing this correctly is a difficult task, but it may well prove to be a necessary step in the near future. Whether you’re planning on selling shares on the open market or giving equity to employees as compensation for reduced salaries, knowledge of the mechanisms of equity funding is a great skill to have.
Monitoring Your Books
Being personally in control of your finances will be a boon for any business owner in 2023, as it makes it easier to assess cash flows and make informed financial decisions. Setting time aside for reviewing and monitoring your books may be difficult, but being intimately familiar with your own business’ finances improves your chances of avoiding insolvency.
Everyday Financial Management
The current set of crises almost guarantee that cash flows issues will be a problem for quite a few companies in the coming months. Being able to keep your finger on the pulse of your business is going to be crucial in 2023. Keeping an eye out on what bills are due and when, when, and how much suppliers are owed, and how much the employees need to be paid are all arduous but necessary tasks. Failing to meet or settle any of these debts is a sure way to end up insolvent, and the ability to avoid that is going to be invaluable for companies going forward.
Reporting on Business Activities
Having a good understanding of your business process and cash flows is often only half the battle. Being proficient in compiling and presenting reports is a really hard and time-consuming bit.
Companies need to be able to deliver on that front, whether the recipients are the shareholders looking out for their investment, upper management wanting to review an aspect of the company, or the government figuring out how to tax the business.
Being able to do so with minimum effort or disruption to the business process has never been more important than now.
Filing Tax Reports and Paying Taxes
In our current day and age, tax reports are notoriously hard to do – which is why accountants and bookkeeping services are in such high demand and high regard. While procuring the services of professionals to take care of business is often a good idea, it’s bad form to just leave all of the work to them.
Planning the payment of taxes is an important part of financial management, and thus it is a good skill to have.
Planning for an Exit
Not all businesses are built to last in perpetuity – and even those that start with that idea can end up failing sooner or later. In the unstable climate of 2023, recognizing at what point the venture has fulfilled its job or is no longer commercially viable is going to be incredibly important.
Being able to formulate adequate plans in case you reach the end of the line is also an invaluable skill to have.
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