5 Effective Ways to Keep Your Business Financially Healthy

The best idea to ensure that your business remains solvent is to always know your numbers, including expenses, payroll, revenue and overheads.


The coronavirus pandemic has made maintaining the financial health of a business very difficult for many companies. In fact, a recent survey has revealed that 80% of companies have seen a decrease in their cash flow. This has been largely due to the prolonged COVID-19 related lockdowns that have impacted economic activities across the world. The slowdown of economic activities has also had an impact on payments to employees, loan payments, and taxes.

While the government is taking steps to improve the economic health of the nation, there are certain ways you can also improve the financial health of your business, including investing in fixed deposits. Here’s a look.

1. Keep Track of Your Numbers

The best idea to ensure that your business remains solvent is to always know your numbers, including expenses, payroll, revenue and overheads. Learn how to read balance sheets and spreadsheets, forecast sales and create financial models. This will give you a clearer idea about how much you are spending and the ROI, as well as the financial health of your company.

2. Build an Emergency Business Fund

Do you know that almost half of all businesses have a cash buffer of less than a single month? There are times when your business might face a crunch and having an emergency fund is vital for those times. One option for an emergency fund is to invest in a fixed deposit that will earn for you. FDs can provide interest rates of up to 7.90%, along with a flexible tenure. There are even FD calculators that you can use to estimate the interest rate and the final sum, after completion of the tenure. The attractive interest rates and security make fixed deposits an attractive option.

3. Be on Top of Your Billing

One of the biggest problems faced by many companies is the non-payment or late payment of dues. In fact, B2B payments from domestic and foreign clients were delayed by around 42 days on average in 2018, according to an Altradius Payment Practices Barometer report. This led to a revenue loss of almost 23%.

To ensure that you always get paid on time, make sure that you are completely transparent about the pricing. Also, ask questions to ensure that you are understood completely. In case you are dealing with a new customer, check their credit history and ask for deposits. Always try to send you invoice on time and ask for the confirmation that it has been received. Clearly mention in the invoice the last payment date. You can also consider hiring a person to monitor unpaid bills.

4. Keep Overhead Costs at a Minimum

Is that video editing software really necessary for your business or is there a free alternative for it? Set reminders before each of your subscriptions end and evaluate if you really need that service, or if there is a cheaper alternative available.

5. Leverage Technology

Making use of digital tools can save money and time. Today, there are tools for managing your paperwork, improving expense management and accounting processes. This makes everything more convenient and affordable.

Apart from leveraging technology, investing in fixed deposits and taking care of your billing, looking out for growth opportunities is also a good idea for maintaining the financial health of your company.


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