How to manage your small business finances and keep costs down
What is a small business?
Small businesses are privately owned corporations that have fewer employees than a regular sized business. This business also has less annual revenue than a normal sized business. Small businesses recuperate many exemptions by the government because they don’t pass a certain threshold, they also might be eligible for a government grant to help them grow. There are many different types small businesses such as hairdressers, recruitment companies, bakeries and convenience stores.
Money management within a small business is very important to keep it running and for it to prosper. Getting paid is the most important part which needs to be in check as well as the cash flow. Getting paid on time is a big priority that the finance team need to take into consideration, for this you may hire an accountant or a bookkeeper to manage your books. The company directors still need to familiarize themselves with basic bookkeeping and money management activities to ensure that that they can understand credit, read bank statements and understand tax forms. Finance courses should be offered to finance staff to ensure they are up to date on the process.
To keep the costs down you will need to give careful consideration to the way you allow your customers to purchase the goods. If you allow people to pay via invoices on a 30-day term then you need to ensure that you factor this into your cash flow and chase the customer to ensure payment on time. It is better to have cash, debit card and credit card options to ensure you can get your money as soon as possible.
Here are some other ways you can manage your small business finances and keep costs down:
Can't manage your business finances? Find out more about our business finance courses.