Worried about your business finances? “Balancing the books” and staying profitable can be hard to get right, so we’ve compiled our top tips for making the most of your money.
CREATE A BUDGET.
This one may seem obvious, but it’s the most important thing you can do when setting up your business finances. A budget will help you plan your income (revenue) and costs (expenses) to help you ensure you’re never in the red and can help you make important decisions about if, where, and how you invest. Keeping track of your money is always important, but in particular when starting out. We have another article about small business budget tips, so if you want to know more about budgets, you should check it out!
MONITOR YOUR CASH FLOW CLOSELY.
Cash flow refers to where money is being earned, and where it’s being spent. Monitoring this is the key to a successful business. Without knowing where the money is coming in and going out, it’s near impossible to make a profit. It’s critical that you have enough money to cover your financial commitments and expenses (“payables”), and that you stay on top of money due to you (“receivables”) Most modern accounting software can be connected to your business bank account to help automatically sync the amounts. Take some time to set it up, or your own cash flow spreadsheets, to ensure you never neglect these important steps.
PRICE YOURSELF CORRECTLY.
Make sure you’re setting the right price for your services. Both under- and over-pricing your services and/or products will lead to a profit and cash flow problem. Under-pricing prevents you from making enough money to sustain your business, and over-pricing deters potential clients and customers from purchasing in the first place.
Finance consultants can help you develop financial practices to help you make good decisions. To start, they may help you create an analysis to pinpoint your current financial state compared to your goals. Knowing what tools and reports you need, based on your unique business objectives, is critical in order to experience positive returns.
If you need more help understanding business finances, visit Cansulta.com and get the help you deserve.