When getting your first business up and running, you could understandably feel daunted due to your lack of experience. You could also have a lot of questions buzzing around your head.
If many of those questions concern how you will effectively handle your money, don’t fret; here, we have brought together various beginner-friendly pointers for keeping your company in good financial health.
Yes, smart people indeed budget
Naturally, you will be eager to make your business as good as it can be; however, you will still have to do that within particular financial limits.
Needless to say, if you don’t have a lot of money at your disposal, those limits are going to be strict – at least to begin with. Hence, you need to budget to keep close track of how much is coming in so that it won’t fall short of what goes out.
Outsource responsibilities to an accountant
While, as IntelligentHQ notes, you can start budgeting without an accountant, you could soon find that asking an accountant for help eases the task.
This could be especially the case later in your company’s development, once your revenue and spending streams have become more sophisticated.
This is relevant advice regardless of which sector your business is in.
It’s worth putting particularly strong consideration to an accountancy firm based physically close to your company’s operations. This would make it easier for you to meet your accountant in person at the company’s bricks and mortar base. If, for instance, you are based in London, the Harrow accountants at Akshar & Co could be worth paying particular attention to.
They could provide you with abundant advice about taxation and so help to clear lingering confusion about that subject.
Ensure that payments are quick but straightforward
In a thoroughly informative article by The Guardian, one wonderful piece of advice for small business owners is to invoice clients quickly – in fact, as soon as you have completed the work for them.
This is because, if you don’t invoice until two weeks following that completion, the money won’t actually reach your bank account for another two weeks.
That’s about a month between finishing the work and receiving your due payment for it!
Therefore, remember to always send invoices by email; this will ensure that each one arrives immediately and there will be a record of what was sent and when.
Furthermore, make sure that each payment will be made online. This will be easier for the client and also prevent you getting hit with the kind of delays that will result if you agree to be paid instead by cheque. Another thing you can also consider is ACH debits, so you don’t have to worry about your client missing any payment. You can read this Rotessa how-to guide to find out more.
Focus more on cash flow than profit
Look after the cash flow and the profits will look after themselves, to modify a well-known saying about handling money. To this end, you could opt to, from an early stage, work only with clients who you know are reliable and pay quickly.
Don’t overly worry if this initially results in your clients being smaller and your profits being slimmer.