Your company generates revenue, but it disappears by the end of the month? Here’s why (and what to do about it)!

You work hard. Your business is running smoothly, sales are strong, customers are eager to buy… and yet, at the end of the month, there’s nothing left in the account. Where is the money going? Is this normal? And above all, how can you regain control?

In short

Generating sales is all well and good. But to build a strong, profitable business, you need to control your spending, optimize your cash flows and make strategic decisions based on reliable data. These are the key takeaways:

  1. Strong earnings do not guarantee profits.
  2. Analyze and optimize each expense based on its actual value.
  3. Manage your cash flow on a daily basis to avoid surprises.
  4. Remember that your decisions should be backed by data, not just based on instinct.
  5. Secure your growth by getting expert support.
  6. If you’re experiencing difficulties, financial recovery experts can help you get back on your feet.

Many SME owners experience this and often feel discouraged: the business is on course, sales seem good, but there’s nothing left at the end of the month. The good news is that there are practical solutions. Here are some tips to help you better understand what is eating away at your cash flow, regain control of your finances and improve the long-term financial health of your business.

1. Are your expenses aligned with your revenues?

It’s easy to fall into the trap of thinking that more revenue automatically equals more profit and cash flow. But unless you keep a tight rein on your expenses, it’s just the opposite. Commercial lease payments, wages, supplies, software, marketing… every penny counts. A well-structured operating budget helps you keep track of the big picture.

2. Do you have a clear grasp of your actual profitability?

Certain activities or products may generate high sales but low margins. You therefore need to identify what is profitable and what is less so. Regularly reviewing your production costs can reveal surprises and opportunities for optimization.

3. Do you actively manage your cash flows?

Even a profitable business can find itself short on cash. Careful monitoring of cash inflows and outflows, combined with a cash flow forecast, will save you quite a lot of headaches.

4. Are your decisions data-driven?

Intuitive business decisions are good… but it’s even better when they’re backed up by figures. Up-to-date financial statements, clear indicators and a management dashboard can greatly help you make informed decisions.

Consider this example: you invest in local radio advertising without knowing how many customers it actually attracts. Meanwhile, your online campaigns could generate stronger results, but you’re not investing as much in them.

5. What if you didn’t have to go it alone?

Running an SME means wearing many hats. But financial considerations often warrant an outside perspective. A financial management advisor or chartered accountant can make all the difference. They can help you better understand your figures as well as build sustainable and profitable strategies.

6. Is your situation more precarious? Seek professional help!

If your business is experiencing financial difficulties, debts are piling up or you’re having difficulty making payments, it’s essential to act quickly. Our financial recovery experts at Raymond Chabot are here to support you with kindness and professionalism. Together, we can analyze your situation, identify concrete solutions and help you get your business back on track.

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