Coming to terms with the amount of money you ‘owe’ can be one of the most confronting issues for any business owner.
That’s why many put it off and prefer not to look! Yet, it’s something that has to be taken on and dealt with.
Amazing as it sounds, there are many business owners who simply don’t know how much they owe. They might have a general idea of their regular expenses, like wages and rent, but after that it all gets a bit hazy.
At best, for some it might be a list of Aged Payables. But this often only includes Trade Suppliers.
But what about a list of ALL amounts owed? We like to see all of the amounts owing to show up in the Accounts Payable listing. It’s the best way to capture ALLamounts owed.
This includes all monthly financial commitments (eg lease payments, rent etc) as well as trade suppliers.
To be complete, this should also include the ATO and super owing.
For the ATO, split this between GST, PAYG for wages and any PAYG instalments owing.
Super owing needs to be added to this as well. Current super as well as any owed from the past.
As one client we spoke to last week said, “I guess I’d rather know than not know.”
Now, more than ever, business owners need to be on top of their financial position. By getting a clear understanding what you owe you are in a strong position. That’s because you can set the plans to generate the income to cover these costs.
If you don’t, you’re flying bling. And disaster awaits!
Let me know if you need a hand - this is an area we’re particularly skilled in
Peter