Keeping on top of our company finances can sometimes be a real headache. With the day to running of small to medium sized businesses it can be very tempting to want to focus on the more interesting and exciting areas of the business and put off the analysis and organisation of our accounts.
Keeping on top of your company’s finances, however doesn’t have to be such a dreaded task. Here are our top tips for staying on top of your accounts and making sure you stay organised and in control of this all important area of your business.
Bury Your Head in the World of Finance
One of the best things you can do when starting a new business is to educate yourself, and continue to educate yourself in all areas of your business. You should make acquiring knowledge of all areas, from marketing and business development, to accounting and business management, a priority right from them beginning.
So educating yourself about the different areas and requisites of finance is crucial to being able to stay on top of the day to day finances of your company. You should be able to read financial statements, know how to monitor the incoming and outgoings of your company and be able to look through financial reports and understand how future financial projections have been put together.
The cornerstone of all finances within a company come from your financial statements so you really need to be able to understand how these work. Your financial statements include the following vital information: cash flow, income, your balance sheets and an overview of any shareholders equity. So you need to have a really knowledgeable accountant who can organised all of this financial information for you and who can take you through theses statements in detail, on a regular basis so you are kept up to date on your business accounts.
Bring in the Big Guns
As stated above, hiring a top-notch accountant is one of the best investments you can make when you own your own business. You may also want to consider bringing in business and financial consultants for periodical analysis of your business to have a look at the finances of your business with a fresh pair of eyes. It’s always advantageous to get external consultants to come in and help you get your income up to that next level and help you understand how your financial department can be run as efficiently as possible.
It’s also important to know when to get financial capital and the times when your company needs a little financial help. Allow any accountants or financial consultants to advise you on the times when you need extra capital and then do your research on the best companies to offer you what you need with the most competitive packages.
Keep Personal & Business Accounts Separate
This sounds rather obvious but you’d be very surprised how easy it can be to merge the two and let it all get a little confusing. A simple way to ensure the two different accounts don’t get muddled is by organizing business credit cards so that you can keep any business related expenses totally separate and accountable directly to the business.
A second step, to separate your business and personal finances is to create a saving account specifically for your business. You can use this account to set aside a monthly amount and whatever extra you can spare, to build a significant savings account for your business.
Be a Little Tight Fisted
Finding areas in your business that you can cut costs is a good way to keep your cash flow healthy in times where maybe money is a little tight. Alternatively even when you’re going through a healthy period it’s still important to make sure there are no holes in your company where large amounts of cash are dripping out unnecessarily.
Your fixed costs are not the main focus here as they pretty much have to stay consistent month after month, however your variable costs should definitely be a regular focus for you. Look at areas like cloud management rather than costly software. Look at how you can cut travel costs by instead opting for group conference calls and video calls where possible.
Regarding your fixed costs, such as, internet, electricity, a little bit of negotiation can sometimes go a long way. So if you’re looking for additional ways to cut back you may even be able to find areas in your fixed costs where you can cut back a little. Look out for any great deals that your current providers are promoting, contact them and see if you are able to change your tariff to this new contract. Similarly look out for any great deals from competing providers and see what you’re eligible for. Keeping your eye out for great deals can help keep your outgoings as trim as possible.