Looking after the finances is the first step in good business management. When you’ve got a handle on cash flow, and you know how a balance sheet works, it’s far easier to make a profit in those early months after setting up. But even when you’re capable of balancing the books yourself, it’s easy to forget about the profit leaks that can open up without a careful eye on them. And that’s what we’re here to focus on.

Here are the most common areas in which you could be losing money without even knowing it.

No Focus on Acquiring New Customers

If you’re not generating new leads and bringing in new customers that can set up repeat business, you’re not approaching your company management in the right way. Picking up on lead trails isn’t a one-time thing; it needs to happen on a regular basis to ensure your client base is packed out with viable end results. Following up on leads is never going to cost you as much as ignoring or forgetting about them completely, so don’t be afraid to push your marketing in this direction.

A Lack of Loss Prevention

Loss prevention methods ensure you’re not forking out for stock that goes missing (for a variety of reasons), and that you’ve got a good focus on your company’s security. Inventory shrinkage can cost you up to 2% of your total monthly costs. And while it’s hard to think about, sometimes stock will go missing for nefarious reasons. Indeed, many businesses will hire local private investigators if they suspect a thief ring is in action that involves an employee. But thankfully, most issues usually involve admin errors that can be rectified with just a little internal investigating.

A Mismanagement of Payroll

You need to pay your employees a fair wage, but if you don’t know what’s happening in your payroll system, you could be leaking money in multiple areas. If you’re not sure how employees are classified, what their usual working hours are (including overtime), and you’ve not set up a proper tax system, you could be paying thousands in fees in the future. Employees could take you to court and the taxman could knock on your door, wondering where their share of profits has gone.

Continuing to Work with Unprofitable Contracts

Unprofitable contracts litter the working landscape. Vendors can get you over a barrel in the early days, and have you agree to any number of demands that ultimately cost you money. And maybe you couldn’t get a good deal when you were first starting out, but you’re months deep now. It’s not good to stay locked in a contract that doesn’t favour you without even knowing if you’ve got other options! Look into who else you could work with, and never be afraid to negotiate your way out of a deal.

If you’re leaking profits, your bottom line will soon let you know. Don’t wait — catch the cash before this happens!