In the world of business, you either manage your company’s finances properly or you fall from corporate grace fast and for good.
Running a small or mid-sized business is a task for a super-entrepreneur, and the financial piece of the puzzle can be especially tricky unless you’re cautious. If you’re unsure how to make your financial management game work to your advantage, here are a few brief guidelines which you can use to set your business records straight and keep your company flying high in spite of the shifty economy and fierce competition.
1. Keep learning about corporate finances
Before you board the business boat, you should find out more about various aspects of finance, such as financial statements, taxes, and capital sources, and strive to never stop learning about the financial aspect of business. By tracking your company’s finances and debts, you’ll prevent long-term problems such as bookkeeping oversights and irregularities or falling in arrears with rent, taxes, contributions, and other important business payments. On top of that, you should keep learning about financial management as time goes by, and strive to stay up-to-date with accounting software and other productivity-boosting tech tools.
2. Separate private and business bank accounts
As soon as you decide to launch a business, it’s vital to open a separate account for the company and keep your private and business funds apart. That way, you’ll minimize the risk of extensive financial losses in case of commercial fraud. On top of that, you should keep track of corporate expenses and revenues and regularly update your business records as to stay on the safe side of the business law. It’d also be a smart move to look into available financial services in Sydney or hire experts to handle the paperwork for you to make sure your taxes, contributions, and other dues are taken good care of without the expenses conventional bookkeeping services entail.
3. Switch to cloud-based accounting software
Trustworthy accountants, PC-based accounting software, and classic paper-based ledger are all reliable finance management tools, but if you want to take your finance game to the next level, you should consider switching to cloud-based accounting tools. With web-based accounting in the mix, you’ll be able to store, update, monitor, and access important business data anytime and anywhere you want, without hassle, security concerns, or exorbitant costs in the mix. For a bonus, the switch to cloud-based accounting will allow you to access vital financial information on the go, which will make it easier for you to log and keep track of relevant changes on a 24/7 basis.
4. Keep track of business expenses and debts
A common mistake which small and medium-size businesses make in the financial management game, failing to record all revenues and expenses can become a serious problem in the long run. For this reason, it’s highly advisable to enter incoming invoices, payments, reimbursements, and other transactions in your business records, either online or in a paper ledger: it’ll help you track debt collection dates, payment deadlines, and other details pertaining to financial transactions. Also, don’t forget you have the obligation to keep business documents available to financial inspectors for years, so be sure to organize and store the files properly.
5. Make sure your business is audit-proofed
To keep your company on the safe side of the finance management table, it’d be best to audit-proof your business by carefully reviewing its ownership structure, gross revenue, deductions, taxes, contributions, net profits, and other important factors before launch. In addition to that, it’d be wise to hire an expert to track your financial records and draft reports regularly as to help you avoid long-term complications and accumulated debt. For maximum financial management efficiency, you can ask a professional bookkeeper to go over the figures at least twice or three times a year and make sure your financial records are shipshape.
6. Keep your business documentation neat
Another potential finance management hitch you should strive to avoid, disorderly records and other business documents can cost your brand an arm and a leg in the long run. For this reason, it’s recommendable to come up with a simple yet efficient paperwork organization system and back up your invoices, receipts, bills, and other paper documentation on your PC or online. To save space and avoid file handling hassle down the road, you should consider switching to the paperless office concept. By keeping important business data online and accessible in a matter of clicks, you will get to do a small favor to Mother Nature at the same time.
7. Look into available payment options
These days, buyers have become extremely picky when it comes to payment methods, and they don’t like companies which take their debt collection lightly. That’s why you should offer two or more payment options to your customers, such as classic cash, checks, debit cards, credit cards, and electronic cash. For greater payment diversity of your e-business, it’d also be a smart move to offer direct bank transfers to your customers, and perhaps even include special discounts and price deductions for payment options which work best for your brand.
8. Find ways to reduce business costs
Unless you watch your step, keeping up the financial management act over time can turn into a pretty costly affair. For this reason, you should be smart with your finances and find ways to cut financial management costs wherever possible by handling the accounting work on your own or by outsourcing it to a finance-savvy friend or family member. Alternatively, you can pay for the accounting services by a fair barter involving your products or services. Apart from that, you can use free online calls and video conferences with business partners or clients to trim travel costs as much as possible.
As time goes by, you should track your company’s performance and compare it to the past as to get a better insight into the tweaks you can make to ensure peak profits and streamline financial management. After all, if you’re set on raising a small fortune and staying in business for years to come, you might as well treat your finances accordingly. Good luck!