Understanding and managing your business finances is good business sense and allows your business to run more smoothly through good times and bad. In these economic times, businesses should be wary and make sure they have a business that can survive through tough times as without sales over a too prolonged period will make it difficult for a company to survive.
- Design a business plan, decide on a reasonable budget and project for the year tracking all money coming in and leaving your business account. Making sure your plan includes any changes you have in mind for your company in the upcoming year, potential changes in your market and any possible contingencies.
- Keep an eye on your competitors, this is always a good idea as you can benchmark yourself against them, what they are charging, are they offering more or less for the same price. Being competitive is always important, as is offering a great service and product to make sure they return.
- As with your household bills create a budget and regularly check to see how well you are sticking to your projections. Understanding where money may not be used to its full potential and where you can use it more efficiently could save a business a lot of money over a year this could include fixed costs associated with the building, equipment hire, utilities etc as well as finding better deals on adhoc based purchases. Project what the business is likely to achieve in sales for each month based on information from last year, noting when you have spikes in sales so that you can be prepared for the increase in sales. Tracking this regularly means the business is in a better position to react more quickly.
- Keep track of who owes the business money, making sure that there aren’t outstanding bills to be paid to you from ages ago.
- With this deeper real time understanding of the businesses finances you will be better prepared for anything unusual and there should be fewer surprises.
- Choose a tax advisor that understands your business, its needs and can trust, offering you a range of services from bookkeeping to specialist advice that can help your business run more financially efficiently and more profitable. They can help prepare your end of year accounts or alternatively offer more advice throughout the year dependent on your company’s needs and budget.