If you run a small business, there’s no escaping the financials. Whether you’re going it alone or heading up a team, you need a firm grip on what’s coming in and going out of your bank account. From tax returns to forecasting, here are our straightforward tips to managing your finances.
1. Use accounting software
If you’re up to your eyeballs with paper receipts and invoices, it’s time to do yourself a favour and put your finances online. There are lots of free or low cost accounting tools out there – including the likes of Xero and Kashflow – allowing you to manage your finances at the click of a button.
With a desktop widget and a mobile phone app, you can start tracking your incomings and outgoings from anywhere, at any time. It will even make it easier to forecast profits, chase invoices, and sort out your tax returns.
2. Regularly review your finances
It’s all well and good tracking your business finances. But what about actually taking the time to review them? By analysing your figures on a regular basis, you’ll be able to manage risk and tackle cash flow problems head-on. It’s better to recognise sooner rather than later that your business is heading for a challenge – so make sure you face the month ahead with your eyes wide open.
3. Allocate budgets
To keep your business on the path to success, it’s helpful to have a budget in place. How much do you want to be spending on training, travel, business development and equipment? Allocate a set amount for each aspect of your business, and keep track of your expenditure across each area.
4. Chase your invoices
Small businesses can be crippled by slow-paying clients. To avoid cash flow problems, put clear payment terms on your invoices and chase-up non payers regularly. If you’ve already invested in some good accounting software, you’ll be able to see real-time ‘accounts receivable’ reports, showing how much money is owed to your company at any given time. You may even be able to automate emails to chase payment a set number of days after an invoice was issued.
5. Revisit your payment terms
If you’re struggling with cash flow, don’t settle for the status quo. Shake things up by negotiating different invoicing patterns, changing the number of days that clients have to pay, or even establishing some business credit.
6. Get a business account
If you haven’t already got a business account, now is the time to get one. By having a dedicated account for all of your business transactions, you’ll have one clear set of figures to play with. When the tax return deadline starts to loom, you’ll be thankful.
There are lots of different options out there for your business account, so it’s worth shopping around to get the best deal. With Arro, you can instantly open a business account without the hassle of meetings with the bank manager.
To set up your Arro business account, all we need is your company name and address. With no credit check and no hidden charges, you’ll have a fast, safe and simple way of managing your small business finance. To be the first to know when Arro accounts are available, sign up.