Some people might be under the misapprehension that it’s easy enough to run your own small business. And, while this couldn’t be further from the case, late nights, juggling competing demands and some serious networking are part and parcel of the equation. Surely, you can make managing the cash side of things a bit easier. Here are 6 tips for simplifying your small business’ finances.
- Plan for expenses
If you run a small business, you’ll know that cash flow is everything.
Planning ahead for those big expenses is a wise decision, allowing you to minimise those stressful surprises that have a habit of popping up, in typical ‘murphy’s law’ fashion. Business loans provide a safety net – one that can help you to reduce financial blows and to carry you through those inevitable tight periods, keeping your business functioning and simplifying your financial processes over time.
- Review your budget
Reviewing your costs and setting a realistic budget are the keys to managing your finances as a small business. Religiously keep track of all of your small business expenditure. As parameters fluctuate, your will need to regularly review your budget to check that it is sustainable. Set spending and expense limits – and keep in mind that, if you’re a startup, you’ll need to hold the reins tightly for at least the first few years (as initial costs are the biggest forms of expenditures you will experience as a business).
- Tighten your tech processes
We all know that time equals money. Ask yourself; what can you do to cut the flack in your small business? Perhaps it’s going entirely paperless in order to minimise unnecessary costs/wastage (with a helping hand for the environment thrown into the bargain)?
Consider implementing a server so that you have ‘backup’ (don’t run the risk of having to start entirely from scratch/losing your intellectual property). File taxes electronically, bin fax machines and take things online as much as possible. Invest in top-notch cyber security to ensure peace-of-mind. In general, think about streamlining your technological processes for less effort and more assurance over the long haul.
- Tailor your invoices
Your invoicing terms are crucial in ensuring that your cash flow keeps ticking around like clockwork. If you’re experiencing limitations, consider upgrading your invoicing systems – these will help you follow up on unpaid invoices and make the entire process of collecting payment much more transparent.
You can set templates and use email/SMS to follow up. Always use clear, intelligible language and set payment terms to 7 day to make sure there’s considerably less chance of anything slipping through the cracks. Invoice smarter to level up your business into ‘high-function mode’.
- Keep separate accounts.
It’s always a bad idea to mix business with pleasure, and nothing is more applicable when it comes to your bank accounts. If you finances are all bundled up in the one account then you have the perfect recipe for disaster, especially in the form of unexplained losses and a total mess when it comes to tax time. Keep a separate business account in order to accurately gauge your profits and expenses.
- Call in professional assistance
If you’re still having difficulties with managing your finances, consider hiring a good bookkeeper. Maybe you just aren’t cut out for figures and don’t enjoy this side of things? Hiring a professional can make it all so much simpler and allow you to be unencumbered enough to really concentrate on the daily operations of your business.
Sometimes, it’s time to call in the professionals – and, knowing when it’s time to delegate is always always an important component of a sound business acumen. Undoubtedly, there are so many benefits to outsourcing your bookkeeping.
Keeping it simple when you’re a small business
There you have it; some practical ways to simplify finances as a small business. We aren’t saying that building your own bit of business empire won’t take considerable amounts of drive and hard work, but hopefully with these tips you can at least take the guess work out of managing your cash flow. So, let the profits roll in!