If you are a business owner, you probably already know how difficult it is to keep everything running smoothly, balancing your work life with your personal life and ultimately, keep track of the finances. You need to be on top of things at all times, and this includes your cashflow too.
Not paying heed to what is happening in your business’ finances can be detrimental to the future of the business altogether. In this article we’ll give you some handy tips to ensure you’ve got the finances covered.
1. Stick to Budget
Firstly, your budget has to be realistic. Don’t overestimate or underestimate. Once you have a realistic budget, you should always stick to it. The importance of having a realistic budget allows you to have an idea of what you have and what your estimated income may hold.
2. Efficient Admin and Filing
If you’re not one for paperwork, you’d better become one sooner rather than later. Keep all your invoices, statements and other financial documents safe in one place, making sure you’ve got an electronic copy of everything stored somewhere in case of emergency.
3. Don’t Overspend
You may well be tempted to spend money on a new laptop or smartphone for your business, but try to refrain from giving in to those temptations. Your budget will indicate what you can afford to spend on extras and what not. Stick to the budget and avoid financial chaos and calamity for your business.
4. Keep Accounts Separate
Never use one account for personal and business finances. This will ensure everything is kept separate, you get your cut at the end of the month, and you don’t use money you shouldn’t be using. If you consider getting a bookkeeper or accountant, this will make their job much easier at the end of the day.
5. Keep Costs Low
If there is any expense you can cut on, anything at all, do so. If you don’t need a big space for your business, opt for a smaller, more affordable space. If you already own a computer, there is no need really to buy the biggest, flashiest, newest machine out there either.
6. Keep a Tight Grip on Accounts Receivable
Now, there will always be the odd chance that your clients or customers don’t pay. You need to know what is going on in your accounts receivable and follow-up on outstanding payments. If you have too many outstanding payments it can cause the downfall of your venture altogether.
Keeping a tight grip on your business’ finances is a fulltime job and takes discipline and dedication. It will however ensure the success of your venture and ensure you are prepared for whatever happens. If you want to start your business, read this insightful article on which states to avoid and which states is considered the best to start your business in. We wish you all the best in your venture!