5 Financial Advice for a Newly Launched Business in Sweden

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It is very easy for a business to be kicked out of the market because of mismanagement of funds especially in a highly economic country like Sweden.

In this article, we are going to look at financial aspects in which you might need thorough financial advice to keep your business afloat;

  1. Working capital loan

Businesses depend on capital to run and capital is not easy to come by. Capital can be from accruing profits or loans, especially for business startups. 

Whichever way you get your working capital from, the rule is that you effectively and efficiently manage them. 

A strong business finds ways to increase capital and liquidity without seeking out loans. 

Even with credit capital, one should strategize on better ways to acquire capital taking to consider factors such as interest rates and the best payment schedule. 

Find Swedish loan companies that extend financial advice support to their customers by reading independent reviews at Omdömesställe.

One such company that might interest you is Svea Ekonomi. Read their reviews to know whether their services are what you are looking for. 

Once you have your working capital in order, the next piece of financial advice you need for your business is on accounts.

  1. Debt management 

Finding enough running capital will involve securing loans from financial organizations.

It is important for any start-up to Master ways to handle debt. 

An overview of a debt management system for a newly launched business in Sweden include;

  • Signing up for favorable payment terms
  • Consolidate your loans 
  • Pay loans with the highest interest rate first
  • Timely payment of debts
  • Reduce businesses cost and expenses

Debt clearance with creditors will increase your credit score which will make it easier for businesses to secure further loans in the future.

My secret takeaway advice for any business is to list it as a limited liability company which will create some form of secured debt in the sense that upon insolvency, you will not be held personally liable as a sole proprietor. 

  1. Accounting (Revenues and expenses)

Another financial piece of advice for your business is to balance out the revenues and expenses.

To keep track and of your business expenditure as well as the returns, you will need to establish a strong accounting system.

You should deploy strategies that increase revenue for your business and reduce activities that tend to cost your business a lot more. 

This is financially interpreted to mean an efficiency ratio (expenses/ revenue). An efficiency ratio of 50% is optimal. However, the efficiency ratio should never increase because then it would mean you’re spending more money than what your business is channeling in. 

The efficiency ratio should be at an optimal 50% or less. A lower efficiency ratio means that the returns of earnings are more than the spendings. 

Larger businesses have a well-established accounting system that keeps track of revenue and expenses. 

  1. Payrolls

It is of financial importance for every employer to keep a well-kept record of employees’ payroll.

The employer should have a schedule and a paycheck calculating system. 

Payroll management helps with withholding and pay taxes on behalf of employees out which is a requirement for all employers. 

Larger businesses have the option of establishing a human resource officer or for a new start-up, you can outsource human resources services within Sweden.

  1. Taxes 

I’m not planning to go over the legal consequences of not filing your business taxes in Sweden because that is too obvious of knowledge. 

The two main types of business taxation in Sweden are;

  • Value-added tax.

VAT in Sweden is at 25%. VAT will vary depending on the category of the manufactured goods. For instance, there is a reduced rate of 12% for foodstuff that is nonalcoholic. There is zero-rated taxation on pharmaceuticals and products applied to non-profit organizations.

  • Corporate tax

Company taxes as of 2021 stands at 20.04%. one thing about Sweden is that there is no special taxation for foreign companies.

Double taxation cannot apply to countries that have signed bilateral treaties with Sweden.

This is a simple overview of the taxation of businesses in Sweden. You can find a complete tax guide online or get in touch with a taxation professional to take you through all the compliance requirements.

It is always important for a new business to ensure that they have that offer their returns and paid their tax on time to avoid collision with law enforcement which may lead to unnecessary cost.