Most SMEs nowadays are dependent on loans for buying everything and covering employee expenses. In modern times, easy availability of loans has led people to live beyond their financial means. The danger of living life on the basis of loans came to light during the recent economic depression.
Many people lost their jobs while others faced huge salary cuts and their carefully planned budgets went haywire. Many loan accounts went delinquent during this period while some companies even had to file for bankruptcy. This was the time when financial management techniques became popular.
We give you three reasons for a frugal company, courtesy of SteinPag legal experts.
#1: Financial Plans Have Many Benefits
While debt settlement is a drastic method to deal with a situation and although, in some cases mandatory, is more popular and has less negative consequences. By this method there can be rolled many high interest loans into a single low interest debt – which could save your company from going bankrupt. There are many banks and lending organizations willing to reconsider your company’s previous debts.
The best part of opting for financial plans is that the rate of interest you pay will be much lower than the earlier collective interest. You also don’t have to remember the many payment dates of several loans. The term of the loan is sufficiently long to allow you to make the payments easily. The amount of monthly installments is decided according to your monthly income and expense which does not stretch your budget beyond your means.
#2: Financial Expert Companies are Trustworthy
We advise you to trust your financial expert, and we’re not talking here just about the accounting company. Go deeper: a legal firm, and a bookkeeper, all working closely. This will give them the information required to create an effective strategy for you. Most create an effective financial plan that will help you avoid difficult financial situations in the future.
#3: Personal Recommendations or Just “Google It”?
Both, actually. While we highly encourage to go for a personal recommendation from another company, don’t hold back from doing a bit of background check yourself. Always be transparent with your bookkeeper, and use their aid in finding the proper accountant + legal combo. You won’t regret it in the long run.
So are you ready to leave the mouse trap and step into the light with your company?