How to manage your business finances
Understanding and managing your business finances is a vital part of ensuring success within your business. Using effective strategies will help to manage your business finances and allow your business to focus on the operational components to ensure your staff, suppliers, customers, and tax authorities are happy.
Below are 4 essential tips to help manage your business finances.
Managing your cash flow can be one of the biggest challenges a business can face. That is why it is important for your business to have all important measures in place to ensure your cash flow continues to improve not only now but over the long term.
In order for your business to have a healthy cashflow it is important to accurately monitor expenses and receipts to maintain a flow of funds to finance ongoing work.
Streamlining business practices and reducing operating costs will help to manage your businesses cash flow whilst keeping outgoing payments to a minimum.
Budgeting and forecasting
Ensure your business is using cashflow forecasting. This will give you an insight into your future cash flow. A forecast should show all outgoings and receipts so you know at a glance what your balance will be at any time. This will allow you to forward plan better and will indicate if your cash flow might dip, you can act immediately to cut down on your businesses expenses to minimise the impact on your cash flow.
Accurate forecasting helps business planning, so you need to ensure you have a budget that shows upcoming annual costs, so you know when large outgoings like payroll, tax or capital expenditure are coming up.
Purchasing and expenses
The purchasing role is vital for a business because it's important to get a combination of good value, high quality, and timely deliveries which you can achieve by developing good supplier relationships, negotiating skills and economies of scale.
Financial data systems
It is a good idea to use technology, E-invoicing and integrate financial systems to improve the information your finance function provides. Your accounting system, cashflow, budget and forecasting spreadsheets should be linked so that when new data is input, they’re all updated.
This will save your business time, increase accuracy and by linking different business functions all stakeholders can see what the current situation is.
Contact our team today on 1300 4 MORRIS to see how we can help manage your businesses cashflow.