Managing the finances of your small business is essential for its success, and involves so much more than merely numbers and spreadsheets. For longevity and profitability, business owners must plan strategically, and have realistic budgets and clear financial targets.
Whether you choose to seek help from a financial expert, or are going it alone, having an experienced accountant onboard, or using the services of an outsourced accounting provider can help you get a better understanding of your financial position, and make more informed choices for the overall success of your business. However, it still pays to take your own steps towards protecting your business, by working on a few financial management goals, such as the following:
Build a budget
This means carefully assessing your businesses financial history, and using the data to make sensible financial decisions for the coming months and years.
Below are a few goals related to budgeting that might help:
- Review your monthly income in detail
- Add together your fixed costs, from rent and supplies to payroll and taxes etc.
- Identify your variable expenses, such as office supplies and marketing, to determine what you may be able to cut or reduce
- Add up your total income for the month, then, subtract the expenses from revenue; ideally, you’ll achieve a positive number
- For your future budget, check your profits and losses to get a better understanding of what investments might be profitable to repeat, and which ones you might want to minimize or avoid
Manage your cashflow
All businesses must have a contingency budget that allows them to continue operating even when finances get low, and by analyzing the margins and reducing unnecessary expenses, businesses can boost their efficiency. With the help of an accountant – either in-house or remote, via an outsourcing firm – you can find ways to better manage your cashflow and ensure that no matter how tough things get, you’ve got the finances to continue.
Manage your risks
By creating an efficient filing system and keeping on top of paperwork, you can save time and costs when it comes to paying bills or filing taxes, and make your bookkeeper or accountants job that much easier.
To give yourself even more financial security, try to generate an income from more than one source, that way, if you do start to struggle, you’ll have a contingency plan to keep the business afloat.
If you would like help managing your accounts and taxes as a small business owner, reach out to a professional accountancy firm who can help make sure you don’t just stay afloat, but are always in the black.