How to take your business from financial chaos to financial order

Poor financial management and not having a proper focus on money is a killer for any business. When it comes to small businesses, only 40% turn a profit, 30% breakeven and 30% make a loss. 33% of all businesses will fail in the first 2 years and a common cause is running out of money.

Even growing businesses can run out cash and fail.

You need to do what is necessary to keep a tight grip on your finances.Know your numbers. How much are you making each month? How much cash do you need to pay what you owe? Are you on top of the money that you are owed? Are you putting money aside for upcoming tax bills? Do you have a contingency fund?

The harsh reality is that the longer you neglect your business finances the harder it is to put things right. So if you fail to give finances proper attention here are some tips for sorting this problem out once and for all.

•  Set up a good bookkeeping system. Firstly, a definition because bookkeeping and accounting are often misunderstood. The difference is that bookkeeping is the day-to-day process of entering and reconciling your financial transactions whereas accounting is analytical and involves understanding and acting on the financial information. Cloud-based bookkeeping systems are becoming popular. There are many around and it’s a good idea to try before you buy. Decide how often you will process and reconcile new transactions in your bookkeeping software and keep to that schedule – don’t fall behind!
• Track your expenses. Decide on a filing system for your receipts. To keep it basic, you could file your paperwork away in a box file in date order. You might find, however, that an electronic system will save you time.
• Getting paid. Be clear on your credit terms, issue professional-looking invoices and make it easy for your clients to pay by accepting card payments, PayPal and bank transfers. Review your invoices at least once a week and follow-up promptly when accounts fall overdue.
• Review your financial performance regularly. Ideally do this monthly and, as a minimum, analyze your balance sheet, profit and loss statement and bank reconciliations.
• Be clear on what tax you need to pay. Unexpected tax obligations are often the cause of businesses going under. So find out what you might owe in the future and set aside money each month to put towards your tax bill.

With all of this in place, you’ll feel a sense of relief. Once you get to grips with your finances you’ll feel empowered to move onto growing your business on solid foundations.

Let us help you create a more profitable & sustainable business.

Email: [email protected] now to arrange your complimentary FREE 30 minute Business Strategy Session, where we will help you identify at least 5 ways to solve your most painful problems & improve your business.