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Managing your business finances can be a full-time job for some and an after-thought for others. The size, nature, turnover, and other factors all play a huge part in how your finances should be managed. Sometimes though you just have to roll up your sleeves and get stuck into your ledger every now and then to balance the books. However, there are some good practices that you can employ to really help you stay on top of your business finances. Here are 3 good habits to get into to manage your finances.
Set your budget
Setting a budget is good advice regardless of your financial endeavor. Laying out how much you spend each month, be it on employees, rent, bills, or other expenses, will make sure you know exactly what your turn over has to be to keep afloat. In your budget, you should also be setting limits on unnecessary expenses and purchases so that you aren’t wasting money that could be better spent elsewhere. When you set your budget out, make sure to review regularly it every few months. The business world changes fast and you must be fluid in order to prevent any financial catastrophes from taking you down.
Have a small account of emergency cash on hand to prevent any potential issues from causing a major dent into your finances. For example, if you are a small, or solo, workshop and one of your air compressors suddenly break then you would be in need of a quick repair to keep the work going. Having emergency cash on hand would help to alleviate any potential costs associated with this. Then, to prevent repeat issues with the compressor (for example) it would be recommended that you look for a company that provides Industrial air compressor and dryer repair and regular servicing to ensure any small issues don’t become major problems. The same could be said for computers or other office equipment. Emergency cash is essential.
Manage your invoicing system
If you send dozens of invoices a month or more, managing them properly is essential to making sure you get paid, promptly and so that you have accurate records for tax and payment purposes in the future. If you struggle to manage paper invoices due to large amounts of work or little time to dedicate to them, then consider getting an automated piece of software that can help manage and track your invoices for you. Some of these are free but many of the better ones come with a small monthly fee. A small price to pay to get paid.
Managing your finances can seem an arduous task, but if you take the proper time and care to do it correctly you save yourself a huge headache in the future. You don’t want to be caught short when you come to submit your returns to the tax-man and find half your outgoings for the year are missing. Keep on top of your finances.