If you dread having to manage your business finances, there are steps you can take to make things easier for yourself, even as a small business owner. If you want to learn how to organise business finances, continue reading for our tips.
Our Top Tips on How to Organise Business Finances
There are a number of steps that you, as a business owner, can be expected to have to take. At the very minimum, you will find yourself having to:
- Set up a business account with a bank.
- Set up your bookkeeping.
- Create a budget.
- Decide how will your clients and customers pay you.
- Manage and control your cash flow.
Looking after just those five points is a job in itself. While you’re liable to have to take care of some of those matters yourself, there are a few things you can do to make things easier too.
Our Tip #1 – Hire a Bookkeeper
Our first tip for how to organise business finances is to hire a bookkeeper. Hiring a bookkeeper has a number of important benefits and will usually improve the overall health and performance of your business. A bookkeeper will:
- Let you focus on running and managing your business – bookkeeping is one of the easiest to outsource aspects of operating a business. Working with a bookkeeper saves you the time you would have to spend looking after your records yourself and frees some of your day up to do what you do best – run your company.
- Ensure your books are free of errors – it is the bookkeeper’s job to stay informed on regulatory and legislative compliance matters where bookkeeping is concerned. As a business owner, you have a company to run, and it may be difficult for you to find enough time to learn everything you need to ensure your records are compliant. Errors, even unintentional, can be costly. Non-compliant record keeping and misreporting, again even unintended, can result in hefty fines. Working with a bookkeeper ensures that this is not going to be a problem for you.
- Keep your records updated – accurately keeping your records up-to date gives you the insights you need to make strategic decisions about your company and manage your cashflow and expenses based on evidence rather than by guessing. Updated books let you more accurately forecast the flow of cash in your business.
Our Tip #2 – Set Up a Business Bank Account
This is something sole traders and micro business owners often neglect, relying on their everyday, personal banking account. There are advantages to having a business bank account however, even if you are “flying solo”. A separate bank account makes it immediately much easier to see and track your business income and expenses by separating your business cashflow from your personal finances.
Our Tip #3 – Commit to Active Cashflow Management
Actively tracking your income and outgoings lets you plan your business expenses more accurately. Planning ahead in this way can give you the peace of mind in knowing that you will be able to afford paying your bills.
Our Tip #4 – Consider What Payment Terms to Offer to Your Customers
Decide how will your clients pay you, what payment types will your business accept and how will you generate your invoices. You may want to create an invoicing template as it is important to provide a correct invoice for the goods you sell or the services you provide.