Managing your business finances is not a glamorous task and unfortunately is one of those things that many small business owners tend to put on the long finger. However, this is the worst thing that you can do as accurate financial management is crucial for the success of any business, large or small. Understanding how your business is performing, where you are overspending and having a general financial overview of your organisation at any one time is vital in allowing you to make the right decisions for the future of your company.
While in the past, big businesses had access to more complex tools and strategies than small operations, this is no longer the case. You can utilise the same tools, and techniques as the bigger players and manage your finances with more confidence moving forward. With your business finances in order, you will have more time to focus on the critical elements of your business that define your company. You will also have a better understanding of where you need to reduce your spending and which areas of your business you need to invest in to bolster your operations.
Let’s take a look at a few tips and tricks that we can learn from big businesses to improve financial management.
Your employees are the heart and soul of your company and you need to ensure that you pay them for their hard work on time. Not only will skipping out on payroll result in a disgruntled workforce but it could also mean you end up paying fines or dealing with other penalties. Hiring corporate payroll services is a great way to ensure that your payroll obligations are met each week or month. They will also ensure that you meet your reporting requirements to the ATO so you avoid any unnecessary fines. Keeping on top of Payroll will help you to manage your finances with greater ease moving forward.
Understanding when your bills are due and when you need to submit reports to the ATO is crucial in ensuring that you don’t receive any penalties or fines. To make sure that you never miss a deadline, be sure to make a list of all of the important financial dates at the beginning of the year and enter them into your calendar. Be sure to set a reminder on your calendar to notify you in advance when these dates are coming up. Being aware of when bills are due or reports need to be submitted will help you to stay in better control of your business finances.
Big businesses have systems in place to precisely monitor their spending so they can account for every last cent, or as close to it as possible. As a small business owner, you can use something as simple as a free expense tracking app on your phone or you can splash out on a premium app for as little as a few dollars. These apps allow you to quickly and easily track your expenses, putting you in the driving seat when it comes to managing your money.
The biggest, most successful businesses are not run by CEOs that manage the company finances with their personal accounts or vice versa. Keeping your personal and business costs separate is absolutely crucial when it comes to streamlining your approach to money management. You should have a separate business account for your business that you use solely for income and expenses related to the running of your venture. This makes things much easier when tax time rolls around. Instead of digging through all of your personal accounts looking for different business expenses, you will have them all right there in one place, making tax time a breeze.
Big companies seem to be able to withstand just about anything. In many cases, this is because they have the financial resources to ride out almost any storm. If they suddenly find themselves in an unexpected legal battle or there is a fire at the business premises, they can usually get back on their feet relatively quickly. This is because they have an emergency fund in place to deal with scenarios like these. As a small business owner, you should have a cash reserve that you can dip into so you can stand on your own two feet if something unexpected happens. Simply putting a few dollars aside each month into a business account can be a great start and in a few years, you will have enough in your emergency fund to help you out should the going ever get particularly tough.
Take Control Of Your Business Finances Going Forward
Small business owners should know precisely what financial position their company is in at any given time. Having a good understanding of how your business is performing financially can help you to plan for the future with greater confidence, regardless of what that future holds. Follow the tips outlined above, take control of your business finances and let your business thrive moving forward.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.