Helpful Tips to Deal with Financial Stress
Whether it’s managing your personal finances or running a business, there are many challenges that impact finances. It could be something small, like an unpaid invoice/bill every now and then, or a bigger curve ball like a natural disaster or an out-of-control debt.
Big or small, these financial pressures can build up and can become something you can’t control. It’s important to realise that you’re not alone and that there is support out there that can help. Financial Counselling Victoria outlines 6 tips to help individuals and businesses avoid financial difficulties.
It’s always a good idea to review your finances, even if your business is doing well.
Make time to check your financials
Prioritising and setting aside regular time to review your finances (and knowing how to do this) is a key first step to gain control of your financial wellbeing. This includes reviewing your Profit and Loss (P&L) statement, Balance Sheet and if you have any loans, guarantees or financial arrangements in place.
Additionally consider what payments you need to make e.g. tax, rent, invoices, utilities insurances, but also just as importantly check what income outstanding invoices are due payable to you.
Act early
The most important thing you can do when dealing with a financial problem is to address it as early as possible. While financial problems are stressful, being proactive will give you more options about what to do next. The options available to you will depend on your situation.
Check your business structure
Are you a sole trader, a partnership, a company, or a trust? This information will help you understand your responsibilities and the options available to you.
In particular, if your business is a company and you are a director of that company, you will have significant legal responsibilities. You need to act in the company’s best interests, and your company must not trade while it’s insolvent.
Seek advice from experts
Professional advice can be very useful in sorting out what to do next. If you have financial problems (or if you think it might), you should consider seeking professional advice from a trusted, qualified adviser, such as an accountant. You might also need to seek legal advice, depending on your situation.
Insolvency and restructuring a business are options you can take to address serious financial trouble. They are complex processes, and if you are contemplating one of these solutions, you will need help from a qualified professional.
Seek financial counselling
You don’t have to go it alone. Financial counsellors are professionals who can help you work through your financial problems. They provide you with practical advice and support and will refer you to other supports where they can.
Contact a financial counsellor by visiting the Small Business Debt Helpline or Financial Counselling Victoria.
Take care of yourself as well as your business
Sometimes, it’s helpful to reflect on your small business goals along with your personal aims and consider whether your business is manageable as it currently operates or whether it is right for you. Running your business in a different way or winding it up might be the best solution for your financial situation.
It can be emotionally difficult to contemplate these options if your business has been a big part of your life and identity. Advice and information are available to help you look after your mental health while you are considering your options.
If you’re in a position where you’re feeling the pinch of financial stress, don’t hesitate to contact us at STS Accounting to help support you through the process.
