Tips on managing your finances
The key to running a successful business is understanding and efficiently managing your finances. Although sometimes, time consuming, keeping a hold of your budget should be the upmost priority. By having an appropriate understanding of your finances, your small business is able to set realistic goals; properly organise your spendings and savings; and allows you to create effective growth strategies. At M.A.S Partners, we are small business accountants based in Sydney, who understand the impact properly managing finances can have on a small business. We have created a list of tips to hopefully help you along your journey in finding financial stability.
Accurately track your cash flow
It is crucial that you are aware of exactly how much your business is spending every month, if not every fortnight. The more you are aware of your spendings, the more money you are likely to save. Often, when your cash flows are not efficiently organised, you overspend- leading to decreased profits. You can use accounting programs such as XERO, or you can go as simple as using an excel sheet. Whatever your business enjoys using the most is the right choice. By accurately tracking your cash flows, you are able to chart it over a period of months, and you will be able to see the cash flow rates going in and out of your business. If your business is growing, hopefully there is more going in!
Create a realistic budget
Once you have effectively tracked your monthly expenditures and spending habits, you can effectively create a realistic budget. If you are predicting drastic changes, do not be afraid to change your budget around. In addition, you should categories your potential expenses for your budget- assigning a percentage per type of expenditure. A common format is the 50, 30, 20 rule, where you assign 50 percent of your budget to expenses, such as payroll and supplies; 30 percent on expanding the business; and 20 percent on developing your products. However, be sure to manage your budget that fits to your goals and needs. A budget should not be a strict rule that never changes, but a guideline that changes depending on your revenue and expenses. A budget will help promote good spending habits for your business- and creating a realistic budget should motivate you to grow, not discourage you by restricting your funding.
Hire a small business accountant
Hiring a small business accountant is an easy solution to manage your finances for a reason. It is the most efficient and effective way to growing your business through financial stability. We at M.A.S Partners provide business services that manage your payroll, accounts payable, accounts receivable, and bank reconciliation. As small business accountants in Sydney Zetland, we also provide advisory on how to grow your business, such as cash flow analysis and KPI analysis. If you are a business owner who seriously considers effectively managing your finances, consider investing in small business accounting. For more information on our services, click here.