Business owners have many finances to keep track of. Incoming and outgoing finances vary month to month, and it can be challenging to stay on top of them, but there are things you can do to make it easier to manage.
Here are some of our tips for keeping track of your business finances:
Keep a record of all your businesses finances. Track important paperwork such as accounting and bookkeeping records, bank records, contracts (including leases and purchase agreements), client invoices and employee records.
Digitising your financial paperwork is a great way to stay organised and keep your records in one place. Doing so may help reduce the chance of you losing important documents. It can also make it easier to track down an energy bill from a few years ago. This can be especially important when you need to do your business taxes.
It can be a good idea to keep some hard copies for safety reasons but make sure you keep them organised.
Invest in the right software
Various software tools are designed to help you manage and track your finances, such as accounting software, budgeting tools, and expense tracking to cashflow analysis software.
It may be worth considering a few different finance software options before deciding what will work for your business.
Having the right software in place allows you to organise and store important financial information efficiently. Saving your financial data to the cloud will enable you to view real-time insights and can be securely accessed from anywhere at any time.
If you don’t already have financial software systems in place, you could talk to a financial professional to find your business’s best solution.
Look at your finances regularly
The best way to keep on top of your finances is to pay regular attention to them.
Schedule time to go through your finances regularly, whether weekly or monthly, to stay on top of things and avoid falling behind. This will help you stay on track of money coming in and out of your business and ensure there are no problems. If there are issues, looking at your finances regularly may help you find and resolve them sooner.
Income and expenses can fluctuate, so you want to check in on things often. A cash flow statement can help you do this by allowing you to track your income and plan your expenses.
Monitoring your finances and projecting future revenue and expenses will enable you to make better long-term decisions for your business. Without this information, it can be challenging to plan, which is crucial to long-term success.
Staying on top of your finances allows you to mitigate any unwanted surprises, and if any surprises do arise, you will be better equipped to handle them.
Prepare a budget
Part of staying organised and planning may include creating a budget for your business.
Many business owners may view this as unnecessary, but preparing a budget outlining your forecast income and expenses may help you manage your cash flow when running your business.
The importance of a budget could be equated with the value of a well-formed business plan. Use a budget as a guide to help you make adjustments when and where necessary.
Instead of planning how every dollar will be spent, create a budget that allows you to make clear-headed and well-informed decisions for your business, whether it’s increasing your market spend or cutting expansion costs to keep profits on track.
A budget may also help you identify where you could improve finances, such as your business’ energy costs. If you feel like you could be saving more on your energy bills, perform a comparison of different business energy plans on offer and find one better suited to your business needs and budget.
For more information on how to save money on energy, check out our blog on energy savings tips – a helpful and easy guide.