Whether you’ve just started your business, or whether you’ve been up and running for a while, it’s absolute essential that you manage your money responsibly and sensibly at all times. No matter how much money your business may be generating, money management will create the divide between generating profits and experiencing success or mishandling finances and slipping into debt or – even – making mistakes that land you in legal trouble with tax collectors and other government agencies.
Here’s some information that can help to keep your small business on track financially.
Budget
Just like we have a budget in our personal lives to manage our personal spending and finances, every business needs its own budget to achieve the same goals. You need to really keep track of what your business is spending and how much it’s bringing in, ensuring that there’s a positive profit margin. You may find that you can cut back in areas and better invest in others. You may find that you have to reprice your products or services according to inflation or savings you can make.
When budgeting look at what you can keep to a minimum, like your business phones for example. Only give these smartphone business contracts to those that need them, rather than them being a free-for-all for all staff members.
Use Professional Advice and Services
Finances can get pretty complicated pretty quickly – especially in relation to a business. It’s hard to keep track of all areas of spending and income, ensuring that you strike a good balance between earnings and outgoings. Managing all of this on top of running the business itself can often be overwhelming and can lead to mistakes, seeing your business slowly slip into financial trouble.
The good news is that there’s plenty of professional advice and services out there. You will have to pay for this, but all in all, it’s almost always more than worth the investment. An accountant can take care of your business’ taxes, ensuring you file your reports at the end of the fiscal year and saving you money through expenses and other tax-specific knowledge they have. Financial advisors like Kanner Group can check in on your spending and ensure that everything is balanced out, providing advice that can help you better save money in the right areas and invest in others.
Pay Your Invoices
Most businesses collaborate with a range of agencies, freelancers and other third parties when it comes to operations. Whether that’s a branding agency you’re using to develop a new brand, a product photographer who has recently taken pictures of your latest releases or a copywriter who’s created some SEO based blog posts for your company blog.
It’s absolutely essential that you track the spending that comes hand in hand with these individuals’ work and that you pay your invoices on time. Few business owners really read the small print of contracts with these bodies and they, fairly (seeing as their livelihood relies on the income from their work, the same as the rest of us) often have clauses detailing late payment charges. The longer you take to pay, the more you can end up forking out, throwing your budget off.
Of course, there are further steps you can take to manage your small business’ money, but those outlined above should get this venture off to a good start!
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