Keeping your finances in the green can always be challenging, especially when it comes to your business. So here are a few ways of keeping your business finances in check so that you’re prepared whatever challenges may come your way.
Give Yourself A Salary
As a business owner, there will always be a blurred line between paying yourself and using the company money as a salary. The best way of avoiding dipping into the company funds too much is to give yourself a salary and more importantly, stick to it. It’ll help you stay on budget but will also mean that profits are going into the business fund rather than your own personal account. It’s very easy to give yourself extra amounts of money, but you should treat your business as an individual with its own separate bank account.
Budgeting is important not only in your personal life but also for the business. Setting a budget both on a monthly and annual basis is important to keep expenditures at a manageable level in relation to what the company can afford. So put the time in your diary to meet with accounts team or individual who deals with the finances, to discuss the budget and what you’ll need for each project, department etc. You should also put in periods throughout the year, where you can re-check budgets to make sure you are on target and to curb any extra spending or encourage a little more spending.
Streamline The Finances
With so many advancements in technology, there’s plenty of software nowadays that companies use to make the daily runnings of the business, easier. Streamlining your finances is a great way of keeping everything in one place so that nothing gets forgotten about or missed. This will also be a great opportunity to review your spending habits, to find the expenditures you’re making that could actually be reduced or cut out altogether.
Review the business priorities and make a list of what’s needed and what could be scrapped. You should minimise your spending, but that shouldn’t be a case of living the frugal life or buying less, it’s just the spending.
Don’t Overcomplicate The Organisation
Not every business can have a mammoth employee rota or the latest, economically friendly IT appliances. Sometimes, businesses can put on too much pressure and make big expenditures that could hinder the financial safety of the company. Spending beyond your means whether that’s in business or your personal life is always risky so don’t overcomplicate the organisation by buying too much too soon. Spread out the costs if you need to and don’t overhire on employees. Use handy systems like Cloudpay to avoid hidden costs and give the company a credit card so that it can have financial backing for the tougher months.
Keeping your business finances in check is always going to be a learning process, and you should always keep an eye on the changes in your business and economically in your industry going forward.