10 Tips To Improve The Financial Management Of Your Business
For your business to succeed and grow, you need to effectively manage the finances for your business. Achieving any of your goals and objectives for your business, will involve organising, governing and closely monitoring the financial resources which are available.
Any well managed business will always fulfil commitments to customers while working towards gaining a competitive edge over it’s competitors and ensure its long term financial stability. All of which can only be accomplished with good financial management.
To help with this, here are 10 simple tips to help with taking control of your business finances.
A Clear Business Plan
Your business plan should detail how you will manage the finances of your business with regards to your cash flow, where it will come from and how it will be used. You can aim to plan this for up 2 to 3 years, outlining the costs which will be required to run your business from day to day while planning for the income your business will need to generate.
Manage Minimum Business Costs
You should always know what your minimum business day-to-day costs are and make sure that you do not go below this. If there is not enough cash flow or available funds to cover items such as wages and rent, even profitable businesses can face difficulties quickly.
Control Your Overheads
Keep a tight control of your business costs and always look at ways in which savings can be made. An ongoing assessment within your business from heating and lighting to equipment and supplier costs, while becoming more efficient will not only provide you with control over your costs but will reduce them.
Deal With Financial Problems, Quickly
At Williams Lester Accountants, we are always on hand to help existing and new clients deal with any financial issues which they encounter. Dealing with financial issues are always stressful but it is important to deal with them quickly before they get out of hand. Deal with urgent or costly debts first and assess your current cashflow management to determine how this can be improved.
Monitor Your Finances
You should be aware of available funds in your business bank account, the sales which are being generated, value of current stock levels and any other business assets which have a financial value associated with them. Try and monitor this on a daily basis while making regular or even monthly reviews on any financial targets you may have set out in your business plans.
Keep Financial Records Up To Date
Keeping track of your financial expenses will ensure you don’t lose money from late customer payments and know when payments will need to be made to suppliers. You can easily keep track of your expenses by using accurate records which will also allow you to manage your business debts and creditors.
Effective Stock Control
Putting systems in place to effectively manage your stock so that you have the right amount of stock available at the right time will reduce waste and free up cash.
Contact WL Accountants
If you would like further information or want to know how the team at WL Accountants will be able to provide you with support, please get in touch:
Keep Track Of Customer Payments
Ensuring customers pay and pay on time is the most important item to manage within your business as you will run into major issues very quickly due to late payments. You can provide incentives for customers to pay invoices early such as reduced payments. Your invoices should be promptly sent to customers and need to be clear and accurate. Use a system that will allow you to easily keep track of your customers, their invoices and payments.
File Returns On Time
With some forward planning, you can avoid paying any unnecessary fines or interest by failing to meet deadlines to file company and tax returns. A lot of time and money can be saved by ensuring this while also keeping accurate records, so you are confident with paying any taxes which are owed.
Fund Your Business Correctly
Assess that you are using your finance options correctly. Even though smaller business will normally rely on overdrafts and personal funds, this is not effective. Normally, overdrafts should be used to finance any short term borrowing needs while loans should be used to purchase assets or make long term investments in your business.
Creditors Voluntary Liquidation
If you feel that your business is no longer viable and cannot continue to trade, we work with industry leading specialists to provide a simple, hassle free process to legally dissolve your business. To find out more, please take a look at our Creditors Voluntary Liquidation or CVL Service.