Small or large, all kinds of businesses depend on the control and use of finance. Whether your business works with a part-time CFO, virtual CFO, contract CFO or a specialist financial advisor, having in-depth knowledge of the financial state of your company is the best way to manage the cash efficiently. Here’s a quick set of tips to follow in order to manage the finances in a small business in an organized manner.
- Day-to-Day Accounting: A good bookkeeper or DIY accounting software or a well-known provider of CFO services can help you keep an accurate track of the income and costs.Even though keeping a record of all of your small business expenses is a tiresome and monotonous task, it helps to fine-tune the flow of the money.
- Invoice: Sending out prompt invoices is a must. Companies should set payment terms to make sure that payments are well remembered. Sent invoices must be followed by emails or SMS follow-ups.
- Separation of Business and Personal Finances: Merging business and personal money is an invitation for uncalled for tax issues and losses. However, many times in small businesses, owners loan the company their personal money. In such scenarios, keep accurate records of the transactions. When the business starts making profits, make sure this loan is cleared first. This is an efficient method to set aside finance steadily and test the profitability of the small business.
- Be Thrifty and economical: Don’t drown in the benefits of being a business owner. Remain frugal and set a modest salary offering government-mandated perks only. Keep travel costs minimal. Whatever you manage to save will act as a safety net for future expenses. For the simpler necessities, take help of online DIY legal documentation. You can even avail the benefits of a virtual CFO. Choose to rent instead of buying equipment and cut down on maintenance costs.
- Plan well, then implement: Before bringing any major changes in the company, make sure to plan and analyze thoroughly and weigh the pros and cons. If you are planning on expansion, ensure it is done steadily and wisely. For making relocation and expansion easier, one may even consider renting the office space. Having a firm control over the marketing and public relations and following a strict marketing strategy helps reduce unnecessary costs and keeps the intentions focused. Avoid large investments on the branding. Business cards, letterheads, marketing, and personalized goods, cars, or inventory before any substantial gain can create a finance flow blockage. Plan as if you expect your small business to make minimal or no revenue. For budgeting and forecasting, make use of virtual CFO services.
- Don’t delay a loan: A common mistake is waiting for the company to be in a financial problem in order to apply for loans. When your business is in its full bloom and making good margins, this is the ideal time to take business loans. It makes the loan a tool for expansion and development rather than an area of worry.
To avoid unforeseen debt and have sufficient money in hand for investment and development are the two main goals every company should keep in mind. To add much more than just financial value to your small business, choose the services offered by one of the finest virtual CFO Auckland firms, Beyond Financials. This way, you assure yourself the best financial and accounting assistance. Thus, giving you the space to expand by focusing on other essential business assets.
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