Time is money, so are you ready to manage both? Business financing can be a tough terrain to navigate, especially without an entire accounting department to guide you. Taxes, invoices, outflows and inflows – where do you even begin?
Here are 5 steps you can take to more effectively manage your small business finances.
Take an Accounting Course
You wouldn’t ask someone to fix a water heater without the proper training, so why not value your finances same way? Luckily, there are tons of free and inexpensive accounting classes available both online and offline. Even a few hours in a 101 course could save you thousands of dollars down the road.
Plan for the Off Season
You may need to have a rainy-day fund but your business needs a rainy quarter fund. Most industries have an off season, but by setting up an emergency fund, you can use your high months to subsidize your income during the lows. Many small businesses fall into the trap of thinking they can simply cut back spending during dips, but if an unexpected emergency crops up, you’ll be glad to have the cash on hand.
Pay Tomorrow’s Expenses Today
Procrastinating on your expenses is the quickest way to mismanage your budget. For example, many small business owners neglect their quarterly taxes and find themselves scrambling to pull together a large lump sum right before the due date. Instead of waiting, start setting aside the money for major expenditures now. Treat taxes like any other bill and have a monthly automatic transfer put aside money in a separate account. Think ahead to when you’ll need new or replacement equipment and put yourself on a preemptive payment plan. Staying ahead of your bills will keep you ahead of your competition.
Implement Smart Invoicing
You’ve covered the costs, you’ve done the work and now it’s time to get paid. Chasing after your invoices can be a pain and when you’re jumping from job to job, it’s a pain you just don’t have time to handle. Save yourself the grief by upgrading your invoicing to a paperless smart billing system. Check out the various software options available that let you write and send invoices on your phone, track payments and automatically send follow-up notifications for clients who are late to pay. Best of all, smart invoicing often makes booking and billing easier on your clients as well, so they’re more likely to pay on time and become repeat customers.
Try Going Prepaid
As many business owners know, you might get your check now, but you won’t see the money for days. Timely cash inflows keep the gears turning at a small business and waiting for bank processing could be detrimental. Take back control of your income with a small business prepaid card. For a small fee, you’ll get you your money immediately, so you reinvest in your company’s future. Buy that new machine, put a down payment on a bigger space or even give your top employee a well-deserved bonus. Things can move pretty fast in a growing business. Don’t let your cash flow slow you down.