this week we are focussing on managing your finances…
Knowing your small businesses finances back to front is one of the best ways to manage your businesses cash flow and help your business be sustainable and successful. Staying on top of your finances means you can avoid running out of money, running up business debts and have enough money to invest in and grow your business.
Some Tips for Day-to-Day Financial Management
Keep accurate records of income and expenses - use excel, accounting software or even just write everything down (don’t forget to keep all your invoices, receipts and bank statements).
Record your expenses - there are great mobile apps that make it easier to keep track of your expenses.
Send out your invoices promptly - as soon as possible after providing goods or services
Always follow up on sent invoices - if using accounting software you can usually send automated reminders, or create a template for sending an email reminder
Add an invoice number to your invoices - so you can easily cross-reference these with payments
Consider keeping a separate business bank account - to keep your records clear and easy to manage and keep track of.
Don’t forget to pay yourself - consistently set aside money for paying yourself
Prepare for unexpected expenses - Set aside money on a regular basis for unexpected expenses
Stay frugal -manage and review your costs to see where you are spending your money and if you can make any savings. Don’t buy things you don’t need - especially at the start before you start earning money. Regularly review overheads, utility costs, Internet costs, subscriptions etc for the best price options. When starting out consider doing as much as you can by yourself for yourself, e.g. marketing, book-keeping etc to keep outgoings low and so you have a thorough understanding of your business.
Make financial projections. Having clear financial projections is important. Your main financial projections will help you to anticipate and address possible future obstacles.
Make sure you have enough capital - to get through the startup phase. Plan as if you expect to receive no business revenue for the first while.
Cautiously expand - to ensure it is the right decision and one you can afford.
Womenfolk Dig Deep Useful Finance Links and Resources
Under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it. This is called 'automatic enrolment'. If you employ at least one person you are an employer and you have certain legal duties
Finance Software Options
There are many options for managing your finances of your small business
Excel
Old fashioned, but works well for spreadsheets tracking expenses and sales
Paid for Accountancy Software
These will make tracking and managing your finances easier and include features which will allow you to issue invoices, record purchases, manage your bank accounts and submit VAT returns and obtain analysis and reports of your financial performance at snapshots in time and over requested time periods.
Have a look at the costs involved and check out online reviews to pick the package that will work best for your business and to make sure it is suitable for your business.
There are many options available which you will find online. Some examples include:
For more advanced businesses
Free Accountancy Software
This week’s book is The $100 Startup by Chris Guillebeau a manual to a new way of living. Learn how to: - Earn a good living on your own terms, when and where you want. - Achieve that perfect blend of passion and income to make work something you love.
Great Creators, a podcast series sharing the diverse stories of design and entrepreneurship in Northern Ireland featuring start-ups, community-led projects and established businesses which together make up the rich NI innovation ecosystem.
This podcast is a project by The Graduate School at Queen’s University in partnership with Belfast Design Week.