When you’re running a business, time flies. Things quite easily get away from you. You’ll be spending so much time focusing on the day to day running of the business that changes will happen all around you. Some won’t really impact you much, but some might impact your business quite severely, especially if you don’t grasp the changes early enough and end up having to pay a price. That’s why a lot of business owners end up hiring help. For example, if you haven’t got time to do your own accounts you might engage an accountant or look to invest in accounting software. Here are some changes you might want to keep an eye out for and some tips to make sure they don’t creep up on you and potentially negatively affect your business.
Depending on your business type, you might have a multitude of subscriptions. They can range from accounting subscriptions or contracts (like lease accounting software subscriptions), magazine subscriptions, subscriptions to professional bodies, then the main stuff like car lease renewal, building insurance (along with all the other kinds of insurance), the list goes on.
Usually, when a subscription ends, the renewal price can be a little bit more pricey. Imagine you owned a cell phone contract for your workforce. If this goes up and gets auto renewed you can bet it’ll be for more money. Don’t let these subscriptions sneak up on you and take more money than necessary.
Keep a tab of your subscriptions, whatever they may be, and make sure you know when the renewal is coming up. A lot of the time they might contact you about the renewal. However, some don’t and it can be dangerous…especially if you operate larger accounts with these subscription based businesses.
Accounting Changes: E.G Capital Leases
Accounting can range from pretty simple right the way to wildly complex depending on your business’s accounting arrangements. For example, if you engage in leasing, both as the lessor or lessee, you need to account for these properly. However, the accounting standards have recently changed and if you missed this you might be filling incorrectly. ASC 842 is the new lease accounting guidance you should be following. Previously, a capital lease was the only type that companies needed to capitalize, I.e. record on the balance sheet with an asset and a liability. However, the new rules require almost all leases to be recorded this way, so capital leases have been renamed finance leases.
This might all sound like jargon to you. However, if you use lease accounting arrangements, including the now named finance lease, you need to be treating them in the right way. It’s probably worth checking in with your accountant if you have one, just to make sure you’re filing in compliance with US GAAP.
These can happen. Sometimes, they might be warranted, other times they may not be. The key is to not overreact. A lot of the time the bad review can be taken with a pinch of salt depending on the way you respond to it. Make sure you respond in a calm and dignified manner and show why things went wrong, and how you’re going to deal with it. If the review is wrong, point out how that is the case while remaining professional and polite. You need to jump on these pretty sharpish…the longer they go unanswered the longer they’re going to put people off. Again, even if they’re warranted reviews you can mitigate them by replying and showing how you take feedback on board.
Interest Rate Rises
Interest rate rises can be nasty. If you’re on a variable mortgage, or have interest debt on a business credit card and the FED raises the interest rates you’re going to be left paying more. You may need to occasionally look at your business debt management and pay off appropriate channels so your debt is stacked against the lowest interest. If you don’t have much debt then this won’t really bother you too much but if you utilize debt, you’re going to want to keep an eye on FED raises, as well as when the initial terms on certain leases assets or general debt runs out.