Financial management leaves even the best of us quaking in our boots. But as a small business owner, your finances become even more crucial. Managing cash flow, budgets and keeping the projection of a business’ finances on track is tough!
If you are new to the business world, managing finances can seem daunting. So if crunching numbers and creating budgets isn’t your thing, take a look at our top tips for managing your finances as a small business owner.
- Keep your personal and Business Finances Separate
This might seem like an obvious point to start with. But you might be surprised to learn that more than one-quarter of small business owners and managers (27%) say they do not have a separate bank account for their business (Clutch.co, 2018).
Setting up a separate account for your business allows you to carefully track your ongoing, outgoing costs in order to budget and project properly. Need help? Schedule an appointment at your bank or with your accountant to get started.
- Take time to Understand all of your financial responsibilities
As the owner of a small business, you are solely responsible for managing the financial aspects. But what if you are unsure of your financial responsibilities? Follow a checklist for managing all of your small business finances. This way nothing can fall through the cracks or get missed. This includes managing your taxes, salaries for other staff and hopefully making profits!
- Make Frugality a Habit
By thinking frugally, you can control your spending and invest money more wisely. In the early stages of a startup company, outgoing costs will be high. But it’s important to track these and aim to cut all unnecessary costs where possible. If you are really struggling financially, check out our tips on how to raise capital as a small business.
- Use Accounting Software
Accounting software will work in your favour if you know how to use it. Time-saving tools such as Xero can help you to manage your small business finances successfully. Secure and reliable with 24/7 service available, it’s a fantastic tool to help manage the numbers. You can also import and categorise your latest bank transactions – freeing up time to focus on the overall direction of your business.
- Stay on top of Day to Day Financial Management
Falling behind on day to day financial management is extremely short-sighted, especially for a small business just starting out. Follow these simple points to stay on track:
- Properly manage your accounting – hiring a virtual bookkeeper might be the answer
- Review your costs – keep track of all small business expenses as they can add up quickly
- Make realistic financial projections – your overall business plan should help you to anticipate and address possible future obstacles
- Don’t fall behind on invoicing – send out invoices promptly and follow them up if necessary.
Have you thought about Outsourcing to a Virtual Bookkeeper?
Managing finances can be a tricky endeavour and one you shouldn’t tackle single-handedly. But, on the other hand, hiring a full-time employee to conduct your finances is an expensive option. Have you thought about outsourcing these responsibilities to a Virtual bookkeeper? Read about 6 ways independent financial advisors can outsource to Virtual bookkeeper.