Tips On Managing Your Business Finances
Being in charge of your own business can be an exhilarating time in your life, and undoubtedly you have worked long and hard to get to the point where you are today.
Poor money management and limited cash flow is a real issue with many startups, and your finances can ultimately make or break your business. Without a steady supply of money coming in and a small amount of savings set aside for emergencies, you are at risk of losing all that you have worked for.
Make your finances a priority
It is important that you set time aside to go over your finances on a regular basis. Stop procrastinating! They are a necessity, and your business cannot run without them. Do not keep putting them off. You need to schedule a day and a time to balance your accounts, enter your invoices and receipts, and check that all is running as it should be. If it is up to date, then you will find that you don’t have to spend as much time on it at all.
Invest in quality software
Gone are the days of pencils and ledgers. Today’s financials are maintained by quality accounting software stored in the cloud. It makes working from home, the coffee shop or even on holiday (should you wish) so much more convenient. We are happy to discuss options such as Xero and explain how they work to help your business grow.
Separate business funds from personal funds
You need to be self-disciplined and ensure that your personal funds are entirely separate from your business funds. In order to make sure you are not dipping into your funds to pay your personal bills, allocate yourself a salary to take care of your needs. Ensure you have a cash flow forecast or budget that you regularly check to keep you on the straight and narrow.
Minimise your expenses
For small businesses, in particular, it is important that you reduce your costs, particularly in the beginning. Consider outsourcing, so you don’t need to fund as many startup expenses. Once you have been in business for more than twelve months you will start to understand issues such as seasonal cash flow. Your income will drop off during certain periods, and you need to make allowances for them. If you have been operating for a while, consider going over those expenses to see where you can reduce them. Try to avoid using credit wherever possible.
Set payment terms to benefit you
Offering 30-60 day payment terms does not help your cash flow if you are a small business. In fact, it can hinder them dramatically. Work out your policies and then stick to them. If your clients are late with the payment, remind them as soon as possible. If you continue to send reminder notices, you can be sure that they will pay you promptly next time.
If you are struggling with your bookkeeping, give The Accounts Studio a call. The longer you put off your bookkeeping and accounting tasks, the worse it can be. Remember, small business and creative bookkeeping are our speciality. Our experienced team can advise you on everything from marketing to your finances without the expense of hiring a full-time staff member. Call us on 02 9997 5662 today.