Protecting your business financially is vitally important for its success. Unfortunately, it only needs one thing to go wrong for the outcome to be costly, and you need to have measures in place to reduce the risk of that happening.
There are some insurances you legally must have and others that you can buy if you choose to. You must have your employees insured against accidents and any members of the public or visitors to your premises. Most insurers sell a package, which will include the legal requirements plus things such as business interruption, your stock and equipment and income protection.
Tax audit insurance Is also worth considering. The fees for dealing with a tax audit can be quite high, but this insurance would cover them. The business interruption will replace the profits the company would have made for a specified period, usually two years.
These ‘extra’ things can be vital if some disaster happens such as a fire or flooding, and they are well worth investing in.
Always use registered professionals for your insurance needs, so that you do not fall foul of scams.
Secure Your Systems
If the Internet is used in any part of your business it is vital to secure your systems. Back them up on a regular basis, and install a good anti-virus program. All hardware and software should be updated as and when the updates are issued, as they often are to close possible security breaches.
Change your passwords frequently, and only give the new ones to the workers that actually need them.
Make sure none of your staff ever opens emails or clicks on links that are not from a trusted source. This is a favourite way for hackers to get into your systems, and once they are in they will have access to all your information. This would include your bank accounts, and your money could disappear very quickly.
It could also include classified information that you would not want competitors to know, like the details for a new product. Hackers have been known to blackmail businesses when they have got their hands on these sorts of things.
Check The Personal Property Security Register If You Are Buying Used Goods
The PPSR is in place for your protection and you should check it before you pay out any money for a second-hand piece of machinery, vehicles or equipment. You need to make sure they are debt free. If money is still owed against the item you have bought, the creditors will be able to take it off you. The PPSR is simple and cheap to use and gives you the results of your search very quickly.
It is also useful to register an interest in any goods you are selling if the purchaser cannot pay the agreed price upfront. You can do this for goods, plant, equipment, vehicles and livestock.
Watch Your Finances
The more your business grows the more responsibility you will delegate to other members of your workforce. However, you should always keep an eye on your finances. Have a regular look at your bank to make sure no strange payments are leaving it. If the balance starts to build, move some of the money into an interest paying account that only you have access to. You can always transfer some back if it is needed.
Make sure your staff is aware that banks never ask for login or personal details by email and if they get such a request they should not respond to it. What should happen is the email should be forwarded to the fraud department of whoever you bank with for them to deal with.
Don’t Use Cowboys
It can be very tempting to use a mate’s mate for something to do with your finances because they are cheaper, but don’t be fooled. Any business that provides financial services and products has to be registered and licensed or they are breaking the law. Never be afraid to ask to see their license before you divulge any information to them, and if they cannot show it to you, move on to someone else.
Brokers, accountants and financial advisors all come within these rules and regulations.
If you want to check someone out before you contact them, there is the Australian Securities and Investments Connect Website, which also has a useful page on the sorts of companies you should not deal with. You can check whether they are registered here and if they are not, steer clear of them.
You need to do everything you can to secure the finances of your business, and that involves more than just making profits.
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Vinh Van Lam & Stuart Horrex
Your Creative Coaches @ CoSydney & ArtSHINE industries