When you run your own business, cash flow is king. You need to know exactly how much is coming into and what you are paying for. Keeping an eye on this is integral, however, it can be time-consuming. When you have a million and one other things to do, finances can often fall by the wayside and that is when a business can get into trouble. Big corporations have specific finance departments to ensure everything is running as it should be. Understand that and you'll realise the importance of this part of your business. Let's explore how managing your business finances can be made easier and more accessible to the average business owner.
Hire A Bookkeeper
Firstly, you probably didn't start a business to become an expert in finance. It might not be part of your skillset. This is where getting an expert involved can help. As a business owner, learning to delegate is an important procedure to undertake. If you can hire a bookkeeper, you can hand over a lot of that financial side of things. Find someone that you can trust and they are worth their weight in gold. They'll help with managing your business finances and are often more affordable than you might think.
Invest In A DIY Platform
There are many DIY platforms that will help you with managing your business finances. You may have seen some of these advertised on TV with funny adverts. They all have different features and if you can find one that works for you, it can be a gamechanger. You might be able to try some for free before settling on the one you like the most. The time they save you is worth the price.
Watch Your Cash Flow
It is so important to watch your cash flow. If things are hard for your business, ensure that you are checking it daily. Maybe you are one of those people who are likely to forget as you get swept along in other areas of the business? Sound like you? Then set a reminder on your phone. If things are going out but not coming in, your situation can take a turn for the worse extremely quickly.
Chase Those Invoices
Unfortunately, for many businesses, chasing invoices take up a lot of time. Without that chase though, so often you will not get paid. According to a report commissioned by Intuit QuickBooks, 56.4 million hours each year were used to look for overdue and late payments. Sounds ridiculous, doesn't it!? Ensure you are paying your own invoices on time, otherwise, you are part of the problem. Take a look here about adding extra charges to overdue invoices.
When managing your business finances, don't forget to pay yourself. You need to be running a business that can support you financially. You need to reinvest the money you make, which we'll get onto shortly, however, you need to earn a living. Some people suggest taking 10% of what you make as your salary, to begin with anyway. Paying yourself is an important part of running a business. Otherwise, what are you getting from it apart from stress and long hours?
Pay Your Bills
We've mentioned this already but make sure you pay your bills. If you aren't paying yours, what right do you have to moan about people not paying you? Managing your business finances is all about getting a handle on all aspects of your money. If you are struggling, talk to your suppliers. This is much better than ghosting them and ignoring their calls. They can often help or put a payment plan together for you.
Deadlines are a huge part of the business world. When reports have to be submitted and when clients are expecting their inventory. Deadlines help us to focus on what needs doing and by when. Make sure you hit business deadlines, including business finances. Your tax returns need to be completed by certain dates and forms submitted at the right place by the right time. Hit those deadlines.
Reinvest & Grow
Reinvesting money in to your business will assist growth. If you take everything out of the company, you'll have nothing to put back into buying more stock, hiring new employees or even paying the electricity bill. If you make a lot from a certain product, use some of that money to buy more in bulk, at a cheaper rate. This will give you even more profit when you sell. With big business plans comes the importance of using the money you earn to help the company go from strength to strength. Reinvestment is important.
Business projections based on sales and statistics allow you to look at the future. What will be the business make and when? What will your turnover be in three years time? How much investment will you need to make to get to that point? Projections show longevity to a business and can help you maximise the money you have.
It is so important to schedule regular reviews about your business. What is going well, what can be improved, and where are there failings that need to be properly assessed? Regular reviews can help you see the overall health of your business and adjust plans going forward. It also means you are managing your business finances with all the information required.
Keep Travel Minimal
With Zoom calls and email, you can keep travel to an absolute minimum. Not only is that good for the planet, but it is also great for your wallet. Less money on travel is more money in your pocket. You also gain time by not having to travel all the time. That time can be better used for other things, rather than standing on a platform waiting for a delayed train.
How often do you switch off? It is all too easy to work, work, work. But what are you working for? Having some downtime away from your business is actually a good thing. You can enjoy time with the people that you love. You can also rest and recover, so you come back to the office feeling fresh. Putting things in place to help with the managing of your business finances allows you to take days off, without worrying about the money side of the company.
Managing your business finances is so important for business owners. Without an eye on the cash, we are all at risk of things going wrong without us knowing. Put your business finances at the forefront and you can plan for the future of your company.