Golden Rules To Manage Finances Well
Staying on top of your business finances can help you make informed decisions, avoid cash flow problems, and ultimately, grow your business. But as a business owner, where do you find the time to manage finances well?
Especially if you aren’t trained in how to do so. To help you navigate the world of business finances, we’ve compiled some top tips that can help you get it right
Tips to Manage Your Business Finances Well
These tips will help you stay on top of cash flow and give you the peace of mind that you have effectively provided for future expenses and optimised on savings, where possible.
Create A Budget And Stick To It
A great starting place is creating a budget. Creating a budget is an excellent way to keep your spending in check and map out the financial component of your growth plans.
Creating your budget is the easy part, sticking to your budget takes a lot of control. Take some time to examine your expenses and income, and create a budget that includes all your expected expenses and projected incomes. Be sure to stick to your budget, and regularly review and adjust it as necessary.
Separate Business And Personal Finance
If you want to save time, money and a lot of admin, keep your personal and business finances apart. Separate bank accounts will help you keep track of your business finances and ensure that you’re not mixing business expenses with personal expenses. It’ll also make your bookkeeping easier and cheaper.
Monitor Your Cash Flow
Cash flow is the lifeblood of any business. Monitor yours regularly to avoid cash flow problems and ensure that you are managing finances effectively. Keep an eye on your cash inflows and outflows, and make sure you have enough cash on hand to cover your expenses.
Use Accounting Software
Choosing the right accounting software will make it much easier to manage finances in your business. With the right software, you can track your income and expenses, create invoices, automate reconciliations, chase late payments, and even manage payroll. Accounting software will save you time and reduce the risk of errors.
Keep Detailed Records
It’s essential to keep accurate and detailed records of all your financial transactions. This includes income, expenses, and any money owed or received. Keeping detailed records will help you manage finances well and ensure you’re compliant with tax laws. Good accounting software will make this a lot easier for you.
Plan For Taxes
When people think about how to manage business finances, tax planning is often overlooked. Make sure you’re aware of all the tax obligations and deadlines for your business, and plan accordingly. Set aside money throughout the year to cover your tax obligations. Then speak to a tax planning professional like Allevi8HQ to implement tax strategies that will really switch on the tax savings for you.
Regularly Review Your Finances
Regularly reviewing your finances can help you identify potential problems and opportunities. Take some time each month to manage your finances, including reviewing your budget, cash flow, and profit and loss statements. With a regular review, you will be able to hold yourself accountable for overspending or missing out on savings. This will help you make informed decisions and stay on top of your business finances.
Supplier Early Settlement Discounts
Supplier discounts can be a great cost saving strategy in managing business finances. Many suppliers offer discounts for early payments or bulk purchases, providing an opportunity for cost savings. By taking advantage of these discounts, you can effectively reduce your expenses and improve your cash flow.
Here are some ways to leverage supplier discounts:
- Negotiate Favourable Terms: When establishing relationships with suppliers, negotiate favourable terms that include the possibility of discounts for early payments or volume purchases. Clear communication and a mutually beneficial agreement can set the stage for future cost savings and help you better manage your business finances.
- Track Discount Opportunities: Keep a close eye on your invoices and keep an open communications with suppliers to identify discount opportunities. Some suppliers may offer discounts for early payments within a specified timeframe. Stay organised and monitor these opportunities to ensure you don’t miss out on potential savings.
- Maintain Strong Relationships: Building and nurturing relationships with your suppliers can open doors to exclusive discounts and favourable terms. Cultivate a positive rapport, communicate effectively, and explore opportunities for long-term partnerships.
Strong relationships can result in better pricing, flexible payment terms, and priority access to discounts. If a supplier is sitting with too much inventory that they want to move, they’ll sometimes call their favourite customers and offer a discount. A symbiotic relationship is a win-win for both you and your supplier and will help manage finances effectively.
Managing your business finances can be challenging, but with these tips, you’ll be off to a good start. Reach out to our business advisory team at Allevi8HQ today and let’s get on track with your business finances.
FAQs
Are there apps to help my business manage finances?
Yes. There are numerous apps and software solutions available to help businesses manage finances more efficiently.
- Accounting software like QuickBooks, Xero, and FreshBooks offer comprehensive accounting solutions, including invoicing, expense tracking, financial reporting, and bank reconciliation.
- Expense tracking apps like Expensify, Receipt Bank, and Zoho Expense help you track and manage your business expenses by capturing receipts, categorising expenses, and generating expense reports.
- Receipt scanning apps like Dext, Shoeboxed, Evernote, and Genius Scan allow you to digitise and store receipts, making it easier to track expenses and maintain accurate records.
Can a bookkeeper help me manage my business finances?
Yes, a bookkeeper can be an invaluable resource in managing your business finances. Bookkeepers are professionals who specialise in recording and organising financial transactions for businesses.
Our bookkeepers at Allevi8HQ can provide you with valuable insights into your business’s financial health and help you make informed decisions about budgeting, cash flow management, and financial planning.
What are the golden rules for managing finances?
- Spend less than you earn
- Create a budget
- Save for emergencies
- Invest for the future
- Keep good records
- Review your finances regularly
