Blog

Cash flow issues are among the most common causes of new business failure. Balancing the books is one of the most significant challenges small business owners face. If you run a company and you’re hoping to beat the odds, here are some tips to manage your money.

Separating Personal and Business Finances

When you first start a company, or you launch a home-based business, it may be tempting to use your personal account or transfer funds from your account to boost your business balance. It is common for business owners to invest their own funds but it’s wise to separate personal and company finances from the outset. If you have the same account, this can make tax more complex and it may also present issues when it comes to borrowing money. It’s useful to take a look at FISCAL’s guide on global cash flow analysis to learn more about the complications of gray areas linked to personal and business accounts. If you don’t already have a business account, it’s advisable to use the Internet to explore options.

Implementing Clear Policies and Guidelines

Managing business accounts, payrolls and expenses and processing invoices and orders can be tough, especially if you’re trying to tackle the task alone. Having systems in place and clear guidelines and policies can help to simplify processes and ensure that your team is aware of how you manage the accounts. Make sure that everyone knows what to do when orders come through or payments are made, and ensure you have strategies in place to keep track of and monitor incoming and outgoing payments. Stipulate clear deadlines for clients and ensure that you know when payments are due and how much you owe to each creditor or supplier.

Utilizing Resources and Tools

Many small business owners take on the role of accountant or bookkeeper to save money. If you are managing your own accounts, it’s hugely beneficial to take advantage of tools and resources, such as apps and software programs, to simplify tasks, reduce the risk of errors and save time, effort and money.

Seeking Expert Advice and Outsourcing

If your business is growing, you’re struggling to manage your accounts, or you’d like to free up time to focus on core tasks that complement your skill set, it’s wise to consider seeking expert advice or outsourcing. You could hire an accountant on a part-time basis, pay an external agency to provide a package of services, or work with freelancers. Before you decide who to employ or work with, take the time to weigh up your options, compare prices and read reviews and testimonials. Search for reputable, reliable companies or experienced individuals with an excellent track record.

Money issues are one of the most common causes of business failure. Managing your finances from the outset can help to reduce the risk of cash flow problems and prevent delays when it comes to paying wages, receiving payments from customers and clients and paying tax bills. If you run a small business, and you’re keen to keep on top of your finances, take these tips on board.