Among the main and most common reasons for business failure, as evidenced by academic and sector studies, are inadequate funding and poor financial management; incorrect or insufficient planning and administrative control; cash flows that don’t work, credits that don’t get cashed, and bank accounts that run dry. The latter, in essence, is ultimately what determines a large part of business failures are credit score.
All this while the cardinal rule for good and correct business management is to know exactly where you are at all times, first of all from an administrative and financial point of view. It is a common problem, which also affects successful companies.
Ignoring the obvious or subtle warning signs of administrative and financial problems – which can relate to, for example, cash flows, procurement of necessary resources, unpaid credits, and debt collection – is a surefire way to end up on the side. wrong with business survival statistics.
Corporate bankruptcy: no one can be said to be immune from mistakes, even serious ones
Managing a company – and its entire administrative and financial sphere – is not an easy task. It never was. Even more so these days, with all that the Covid 19 pandemic has brought and will carry with it. But the good ‘business leaders’, the most attentive and shrewd entrepreneurs and managers, also know very well that human resources have extraordinary qualities, but they are not infallible. Indeed, quite the opposite. And even more so in scenarios that are difficult to face, for example with a weak market or in crisis, and other unfavorable factors, important help, often fundamental, can come from new technologies.
This time we are addressing an issue that no entrepreneur and manager would ever want to address: business failure. For those who lead or manage a business that is booming, perhaps the question may seem secondary – even if no reality can ever be said to be immune from errors, even serious ones -, but what the American researchers of Harvard University have highlighted, in one of their Business analyzes, it is very interesting: first of all, many serious mistakes, which lead to corporate disasters, and even to the final failure of the company, rarely have a single cause. And they are rarely, or were, unpredictable, or inevitable. Rather, they often originate and depart from the unexpected interaction, and the joint effect, of many small errors, gaps, decisions, and wrong actions, perhaps considered of little importance, which are ignored or underestimated – if not even hidden – for a long time, too much time. A bit like what happens with a small snow slide that becomes an avalanche.
Business failure is often the result of human error
These latent errors can at some point be combined with other negative conditions, such as external and market conditions, and at that point, the effect is to produce very serious damage. And also lead to the company Crack. The second aspect, or Bias and human defect, is very human: sometimes people tend to minimize and neglect their mistakes. Third: when entrepreneurs and managers notice something is wrong, their reflex is often to correct the symptom rather than its cause.
These are all shortcomings and negligence that the administrative and financial sectors of a company cannot afford. If you don’t want to run the risk of business failure. Maybe those of logistics, or production, can make mistakes, and their mistakes can also be reflected and have more or less heavy consequences also on the financial sphere. But in the management and administrative sector no, one cannot and must not go wrong. Because the error is serious, or if it is the sum and the result of many small errors that are neglected and underestimated over time, damage and consequences can also lead to the failure of the company and of the whole system.
Technology at the service of efficient administration
How to avoid, therefore, errors, negligence, bad management, and evaluations, which can also lead to fatal Crack and a business failure? We need to be realistic, careful, and foresight. All this must be prevented with the right application, dedicated to business administration. An advanced and updated software technological solution – based on the most recent needs and evidence that emerged in the business world – is the most adequate and equipped answer to all the unknowns and risks that can be faced with administrative and financial management activities.
Only a specific and complete application dedicated to the administration and corporate finance sector is able to monitor and efficiently manage all the many activities and functions that are part of the department: from Cash flow to accounting to credit recovery. unpaid. Men and business professionals – even the most capable and successful entrepreneurs and managers – can never err on the side of superficiality and presumption, especially and even more so when faced with situations and perspectives that can be critical and heavy for the market. The extreme, but sometimes very real risk is business failure.
Prevent business failure with an advanced application
Only an application system developed to better manage all the activities, procedures, and functions of the administrative world can give that extra help and that contribution of effectiveness and efficiency that can be fundamental for company developments and fortunes. Also intercepting and preventing those errors and defects that may initially appear of little importance, but which if underestimated and neglected can, more or less quickly, bring the entire company to the brink.
This is also confirmed by specialists in business management and business administration at Harvard University, who have specifically studied many cases of management ‘disaster’ and business failure: new technologies and software applications – including those for administration, finance, and control. – they can no longer be considered an eventuality or a luxury for companies. But they are now essential to be able to guide companies in their journey to achieve their objectives, even in stormy and difficult times. And without making mistakes. Without sinking. But you can’t wait until the ship is already on the rocks: you need to prevent the storm and shipwreck with the right tools.