When you run your own business, bookkeeping is more than just entering invoices and reconciling the bank, it is also about analysing the data to ensure debts don’t outweigh your profits. Did you know 82% of businesses experience cash flow problems?
In this guide we outline 4 easy tips to help you improve your habits when it comes to cash flow management.
1. Stay on top of your transactions
We accounting and bookkeeping professionals love to preach about making sure receipts in and out of the bank are matched up. It’s important to review fees such as bank fees, merchant service fees and expenses such as subscriptions you have set up that come automatically out of the bank – have any of these outgoings increased or decreased?
Knowing your transactions will help you spot anomalies and ensure you amend any mistakes in a timely manner.
2. Track every expense
We know you have heard it all before – “look after the pennies and the pounds will take care of themselves”.
To properly and accurately track your business expenses, it’s important to open a business bank account. Luckily there are a number of options available these days – so be sure to shop around for the best deal and benefits.
It’s much easier to track expenses when using a card, rather than cash, because you have a digital papertrail and receipt of your spending. It’s easy to misplace a paper receipt!
3. Analyse your finances on a monthly basis
Daily check ins are crucial, but you should also consider analysing your cash flow on a monthly basis. This will help you ensure nothing is missed, and will give you an opportunity to identify any trends in expenses.
4. Use cloud based accounting software
Cloud based accounting software will allow for a quick and easy recording of transactions to help you manage your financial records.
There are many different platforms available to small business owners today, and we personally recommend Xero which allows the user to set up a custom ‘dashboard’ for easy viewing of money owed, outstanding invoices, and bank balance.
One thing to be mindful of when it comes to choosing a software, is that it is often sold as ‘DIY bookkeeping’. Although you will find entering the information easier, there is a large element of human error at risk, for example when ensuring transactions are coded correctly. We recommend searching for the right bookkeeping assistance from a qualified bookkeeper who will be able to identify issues and bring them to your attention immediately.
Professional Bookkeeping Services
It is hard to implement the habits whilst trying to run your own business, and you definitely don’t want to find yourself in a situation where you have fines, fees, and cash flow management issues. Why not t invest in the services of a qualified bookkeeper who will track all the information for you?
Speak to us today for a no obligation quote, and let’s see how we can help.
Remember, look after the pennies and the pounds will look after themselves!