Hello World! Welcome Friends! Many individuals are worried about their financial situation at the moment. Times are difficult and unless you have them on lockdown, you might be finding it challenging to live to say the least. If someone is a business owner, this concern is likely to grow drastically.
After all, the situation we are all in with the cost of living crisis means that business costs are rising too. So, business costs are rising and customers are spending less.
This makes it extremely important for you to get your business finances on track, particularly if you want to come out to the other end and start growing your business in the future.
From looking at tips for implementing tip pooling in restaurants to support your employees financially to looking at where you can cut business costs, there are ways that you can get on top of your business finances and move forward.
Let’s have a look at some of the things you can do below:
Stay on Top of Financial Records
One of the most common mistakes made by businesses is not keeping track of their finances. When you are working self-employed or as a sole trader it can be far too easy to forget to track exactly what is coming in and out of the business. Yes, even a self-employed person is classified as a business.
If you are keeping on top of your financial records, you can easily gain the upper hand and guide your business through rough patches in the future. It will enable you to see any risks, mistakes, and also potential times of low-income/high outgoings. You want to highlight any issues sooner rather than later. When it comes to handling payroll, having a check stub maker and keeping track of your pay stubs is indeed crucial for staying on top of your financial records.
A great example of this is overpaying for a service or product that you are able to get considerably lower elsewhere, just by shopping around. When you track your income and expenditures you are able to clearly see where you can afford to cut back and put more money back into the business.
Part of this will include creating a business budget. If you are a sole trader or small business, make sure you include your own wage in the budget and pay it into a personal account, keeping it separate from the business finances.
Keep Track of Invoices
If you find that your business always goes through a rough patch just before invoices are paid, it might be that you aren’t keeping track correctly. Ultimately you are cutting your cash flow into the business by not chasing unpaid invoices because you aren’t tracking them.
Your business will never be healthy if you don’t get on top of your cash flow. It is important for you to chase late invoices from your customers and clients as soon as they hit the deadline. Many businesses are owed money from unpaid invoices, and it can spell disaster in some cases. It’s a serious issue so you need to have a few steps in place:
- Clearly state the payment due date
- Set the payments terms such as interest added
- Set a late payment fee
- Send out reminders
It’s worth keeping a spreadsheet of all your invoices that have been sent and looking over these at least once a week. This way you can see who has paid, who is late, and what reminders you need to send. It can also help you to see when it might be time to take legal action as and when it is called for.
Accept a Variety of Payments
The easier you make it for your customers and clients to pay for your services or products the more likely you are to have your invoices paid on time and in full. You are also more likely to make a sale if your payment process is quick and easy to follow. You should in the long-run boost your income and customer satisfaction.
As well as offering cash/bank transfer as an option makes sure you also offer things like PayPal and cards. If you are providing an expensive service and/or product you may also want to see if there are any finance options you are able to offer your customers. Even if you can’t provide finances yourself you could look for a deal for your customers to use.
Make sure you aren’t offering your customers something that is out of budget or unrealistic as this could harm you in the future too.
Consider Outsourcing to an Accountant
Yes, you are going to have an additional expenses to add to your budget, when you are trying to cut down on your business costs, but it will be worth it. Hiring an accountant like this tax preparer nyc (who also offers plenty of other accounting services) to look after the finances of your business could put you in the best position, after all, it’s their job to find any issues and monitor the financial side of the business.
They will be able to identify anything that is of concern and potentially offer you ways of cutting back and resolving cash flow problems. They will also be able to identify any major mistakes that you are currently making. They can do anything from preparing your end of year taxes to creating a business budget that actually keeps you afloat. These are underrated and you can’t underestimate their value. Think about the phrase ‘spending money to make money’. Outsourcing to an accountant is a great example of this.
Not only this, but by recruiting the help of an accountant you are freeing up your time and therefore bringing more resources back to the business.
When it comes to looking after your business and its finances it is important for you to stay on top of the above tips. The world is a scary place at the moment when it comes to both personal and business finances so, make sure your business stays ahead of any potential problems.
Are you doing anything, in particular, to stay ahead of money worries as a business? It would be great to hear about any tips in the comments below.
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Toodles,
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