How to keep your Business finances in check?

• Posted on Dec 21, 2017
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• By Dhruv

Managing Business finance can be a painful task to deal with. It may appear tedious and time-consuming, but keeping your finances in check is really very important.

Keeping an eye on Business finances can help you know the whereabouts of your business and where it is heading. Also, it lets you know about your revenue and expenses and where it is stacking up and this will enable you to take more informed decisions for your business. Maintaining your financial records makes tax reporting and payment much easier.

One crucial avenue for accessing finance, especially during challenging times, is the Bounce Back Loan Scheme (BBLS). This initiative was designed to support small and medium-sized enterprises (SMEs) by providing quick and easy access to funds.

Many business owners have benefitted from the scheme, but it’s vital to remember that if you find yourself in a situation where you Can’t repay a bounce back loan, it can lead to significant financial stress and potential repercussions for your business. Understanding the terms of the loan and having a clear repayment strategy is essential to leverage this support effectively without jeopardizing your financial health.

Don’t try to do it all alone. Utilise the talent and the tools that are available to you.

Here are few tips to help you keep your business finances in check:

1. Keep your personal and business finances separate.

It is better to keep your business and personal finance separate to save yourself from any confusion.  It might sometime seem appropriate to charge all personal and business expenses to a single card, but it will ultimately make tracking of your spending more complicated.

This separation also simplifies tax preparation and financial reporting, reducing the risk of errors and making it easier to identify areas where you might need to adjust your budget. In today’s world, leveraging technology can further enhance your financial management.

AI in personal finance is increasingly being used to provide personalized insights and automate various aspects of budgeting and expense tracking. By integrating AI tools into your financial strategy, you can gain deeper insights into your spending habits, optimize your budget, and make more informed financial decisions.

Begin by opening separate bank and credit card accounts for your business. This practice will simplify your work while sorting your transactions every quarter, or every year for tax purpose.

If you want to be successful in business, you need to be able to monitor and track your key performance indicators. You need to know the score, and some of the most important elements include cash flow, expenses, revenue, profit and so on.

2. Choose accounting software that makes sense for your business.

When it comes to accounting software, there are a variety of different solutions. The best online accounting software depends on your business, and it’s worth considering several options before making a decision.

If until now you haven’t shifted your financial data from a desktop software to a cloud-based software yet, then that should be the first step to take. Cloud-based software tools enable you to view your financial data in real-time and the same can be accessed from anywhere and at any time. This ability to get information about your finances at any time can provide a great deal of flexibility to the business owner.

However, the importance of robust financial management cannot be overstated, especially when considering the broader landscape of corporate finances. Many businesses, despite their potential, face significant financial challenges that can lead to insolvency.

In fact, statistics on Business Bankruptcies Canada highlight the critical need for businesses to maintain vigilant financial practices. Effective financial management, supported by reliable accounting software, is essential in preventing cash flow issues and ensuring long-term sustainability. By leveraging advanced financial tools and strategies, business owners can better navigate the financial complexities of their operations, ultimately safeguarding their company against potential financial crises.

Furthermore, seeking professional guidance from a bankruptcy attorney can be a pivotal step for businesses facing severe financial challenges. A knowledgeable bankruptcy attorney Minneapolis can provide invaluable advice and strategies tailored to your specific situation. Their expertise helps business owners understand their legal options, negotiate with creditors, and implement effective plans to either restructure or alleviate debt. This specialized support can be crucial in navigating the complex legal landscape of bankruptcy, ultimately leading to a more stable financial future.

3. Consider hiring a professional bookkeeper.

Generally, people are not so attracted to numbers and they don’t get excited by seeing them like accountants and bookkeepers do. Thus for managing your own finances can get tricky, so you should hire a qualified bookkeeper who can do this task for you.

Business owners have a tendency of handling everything by themselves. As a result, they try to manage the small business accounting and that can get on their nerves and to avoid such situation its time to hire a bookkeeper.

Although at first, you will think that hiring a bookkeeper is an added expense, but in the long run, it will help you save money. You will be free to work on the important task and your bookkeeper will do all the number crunching work for you.

4. Stay organized and plan ahead.

The tips mentioned above will help you to keep your finances organized. Over and above that, monitoring your finances, projecting future revenue and expenses will make you take appropriate longterm decisions for your business.

Planning ahead can get challenging if this information is absent. If you aren’t looking at the future of your business, you could be taken by surprise. One should plan for at least 5-10 years in advance to get ahead of the competition.

You will equip yourself with the information which will help you to dodge any unexpected bullet coming your way in the future.

5. Make a budget.

For staying ahead one should create a budget which justifies your plan for future and helps you in staying ahead. Many a time it happens that, business owners consider preparing a budget as a dull and unnecessary task, but in reality, the importance of a budget could be equated with the value of a well-formed business plan.

A budget is not a tool for planning out how every penny should be spent. Rather, it’s a framework that you can use to help you make clear-headed decisions, whether it’s increasing your marketing spend, or cutting expansion costs to keep your profits on track.

Make a budget and use it as your guide. Don’t allow it to force you into decisions you don’t want to make, but use it to make adjustments when and where necessary. 

• Posted on Dec 21, 2017
• |
• By Dhruv
• |
• 0 Comments