5 reasons to review your credit before expanding your business
A financially healthy business is a happy business, which is why maintaining good credit is so important.
Whether you want to expand your business or apply for another business loan, a solid credit score is the first step.
Here are just a few reasons a healthy credit score is so important to your small business:
As a business owner, it's important for your business to be considered valuable and creditworthy. By maintaining a healthy credit score, you can ensure your business is attractive to a number of different parties in the business world.
For example, if you're looking for investors or private business partners, a good credit score will make it easier to attract more investment opportunities.
Likewise, if you're looking to secure a loan from a bank or other financial institution, a healthy credit score is heavily considered during lending process.
More Lending Power
Speaking of securing a business loan, your business can increase its credit capacity greatly just by maintaining a healthy credit score.
As the following article looks at, considering there are 5 ways your good credit can go bad, maintaining a healthy business credit track record is extremely important.
Whether you want to increase your line of credit with the bank or with your credit card provider, good business credit opens the door for larger credit capacities.
When you're able to rely on your business for credit, it also eliminates the need to involve your personal finances.
Personal Lending Protection
Protecting your personal credit score is important.
If your personal credit score drops, it will not only jeopardize your business, but your personal finances as well. That's why you need to do all you can to build and rely on your business credit.
With business credit stability, you can take your personal finances completely out of the equation.
When accepting your first business loan, lenders usually take your personal credit history into consideration when making their decision. This is perfectly fine; but start building a business line of credit as soon as possible.
Once your business is up and running and you have one to two years of business credit history built, remove your personal credit from your business. This includes making sure your personal credit score isn't periodically checked due to your business activities.
Healthy credit is beneficial to your business in itself, but it can also be advantageous when it comes to your business relationships.
When vendors, partners, investors, and clients see your business has a healthy credit history, they will be more likely to do business with you. It's that simple.
Good Credit Tips
Making sure you pay all of your credit cards, loans, and other business-related bills on time will help you maintain a healthy credit. With that said, it's also wise to monitor your business credit score regularly.
Checking your credit score is free, it doesn't negatively affect your score like hard inquiries do, and it will help protect your business from fraudulent crediting activities and mistakes.
Finally, if you notice a drastic decrease in your credit score, make sure you contact your credit bureau immediately.
From increased credit capacities to business value, it's plain to see why your business's credit score is so important.
About the Author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including credit reports and business finances.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.