Top 10 Financial Mistakes Made By Pest Control Companies
Administering to all aspects of your pest control company is never simple. As an owner or manager you must manage workflow, cash flow, sales, overhead, inventory, and your employee’s needs, all while not neglecting customer service. With every one of these responsibilities it can be easy to make mistakes in your businesses accounting and bookkeeping.
Here are some of the most frequent accounting mistakes compiled from current and former PCO’s:
1. Not separating personal finances from your business. Mixing up business and personal money can cause bookkeeping and legal problems.
2. Turning over your financials to someone else. Without an intimate knowledge of your company’s finances, you can’t make successful business decisions. Even if you don’t want to deal with the daily bookkeeping tasks, look at your financial statements every month to help you plan for profits and prevent potential problems.
3. Setting prices too low. Know your costs before you set product or service prices, or you run the risk of losing money on every sale. A simple break-even analysis can help you set prices at a profitable level.
4. Mistaking profits for cash. When you have a lot of credit sales, your company can post big profits without seeing any cash.
5. Not knowing your true cash balance. Due to things like automatic payments and bank charges, money that appears on your bank statement and your checking account may already be spent.
6. Extending credit without checking credit. Until you collect some basic credit information about that new large account, don’t make on-account sales. A sale won’t do you much good if your company never gets paid.
7. Paying bills too soon. If your vendors give you 30 days to pay them, take it! Unless you get a discount for paying early, paying your bills only when they’re due improves your company’s cash flow.
8. Avoiding bookkeeping tasks. Not recording and posting transactions regularly leaves you with a mountain of bookkeeping to deal with instead of a molehill. Plus, the time lag can act like a vacuum, where transactions disappear and never are recorded.
9. Not hiring a payroll service. The minor cost of hiring out this task provides a huge benefit for your company. It can free up your time and help avoid the financial penalties that go along with late and incorrect filings.
10. Spending too much during pest season and not planning for the winter. The winter months are usually slower in most markets, but overheard must still be paid. Look at setting a little aside for this less profitable season.
As with almost every piece of advice, there are some situations that the advice would be inaccurate. I feel that most most of these rules apply to the small business owners of the pest control industry. I hope a few of these financial tips will help in keeping your pest control company thriving.
What other financial advice have you found to be critical in running a successful pest control company? Please comment below!
And if you need Charlotte Pest Control call Bulwark Exterminating.