The Ultimate Guide to Protecting Your Company’s Financial Assets

As a business leader, your primary role is to ensure that your organization continues to survive and thrive in the short, medium and long term. On a purely practical basis, this usually entails devising strategies which will point each department in the right direction of development, sensing opportunities for moves into new markets, and ensuring that everyone who works for your company has what they need to do the best job they can.

However, it is also important to step back every once in a while, and remind yourself of what it is which makes a business successful and gives it longevity: money. 

It might sound crass, but if you can’t manage the money you earn, then you will stand no chance of achieving security in the foreseeable future. 

While you might often hear about individuals who manage their wealth effectively, the same is true of businesses. You need to know where to store your wealth, how to protect it and how to grow it if possible. 

Unless you have a background in the finance sector, alarm bells might be ringing at this point, but you shouldn’t worry. You are not personally responsible for handling your business’s financial assets, but you should have a working understanding of the different options at your disposal, so that you can make the best decisions possible regarding your corporate wealth. 

This is the ultimate guide to protecting your company’s financial assets:

Go and Seek Out Professional Financial Advice 

The first and most important step you need to take when dealing with financial matters is to seek out specialist help from financial advisors. 

No one can tell you what to do with your money (especially not when it is your company’s financial assets), but it is crucial that you decipher between the advice of other business people, and trained professionals who have specialist experience to help with your requirements. 

Therefore, listen to the guidance of trusted wealth management advisors who can give you invaluable information about how to protect financial assets, as well as other financial challenges, such as preparing for your own retirement. 

Ascertain How Much Your Business is Actually Worth 

One of the most important steps you need to take if you want to protect your business’s financial assets is to ascertain how much they are worth. You can’t make an informed decision unless you know what you are dealing with, so take the time to assess how much your business currently has on its balance sheet. 

A lot of this money will be reinvested straight back into the business, another portion is taxable, and then you will need some money left over as an emergency fund, in case of cash flow issues that can quickly bleed your company dry.

However, you may be fortunate enough to have some money left over once these other demands are taken care of. If it is only a nominal amount, then it may not be worth investing it or putting it into safe keeping, but if it is a substantial figure, then you may want to consider options for protecting it. 

Research the Tax Implications of Your Current Jurisdiction 

A key tenet of many wealthy individuals and financial advisors is that it is taxes which primarily dictate the financial success of both people and corporate entities, rather than any natural gift for sensing opportunities or finding a certain place to park your wealth.

At first glance this might sound like a boring piece of advice, but when you peek beneath the surface it starts to make sense.

After all, both the amount and type of taxes levied in different jurisdictions can swing wildly, largely shaping the financial health of the businesses which operate in the area as a result. 

Therefore, make it a priority to research the tax demands in your current area alongside your accountancy department, to work out how you can best work to those requirements. 

You may decide that you want to base your business in an area with a more favorable tax policy, which could be beneficial if you want to protect the financial assets of your company. 

Consider Protecting Your Profits in Other Financial Vehicles 

Once you have a better idea of what type of financial assets your business has, and how much they are worth, it is time to find a place to store this wealth.

Investing with corporate money is never a sensible idea unless you know exactly what you are doing, but you may want to consider researching the viability of housing your money in a ‘store of value’ asset like gold or even bitcoin.

The emphasis here should be on protection, rather than profit. While it is always preferable to find a financial vehicle that increases your wealth, you should focus more on preventing your business from losing money. 

To give a recent real-world example which illustrates this ethos, medium-sized tech company MicroStrategy has invested a significant portion of its balance sheet in bitcoin, which its CEO Michael Saylor believes to be a safer store of value than conventional fiat currency. 

Indeed, it may be a good idea to educate yourself on the nature of money and the global financial system itself, as well as the various asset classes available.

Merely taking your guidance off of other people is no substitute for doing your own research, and a working understanding of how money works (and how factors like currency inflation can significantly impact it), will make the protection of your business’s financial assets far more straightforward.