Entrepreneurs - Eight Point Survival Guide

Posted by Michael Kirby on Dec 6, 2018 7:00:00 AM

Sometimes it can be easy to forget the importance accounting has to the success of your business. Your accounts tell you the true story of your business, and are essential in you predicting and shaping the future of your business.

While these accounts may seem daunting or a task you can put off until tax time, it's imperative to get started today.

The following is a survival guide of eight points to take hold of your businesses finances.

1. Know your numbers

You've likely written a business plan, with your intentions and vision of the future highlighted, but does this include budgetary milestones? It is essential for you to set financial targets, achieving a 5% year on year growth for example. They keep you focused and provide a form of measurement for your impending success.

2. Keep up-to-date records

Accounts should be updated regularly, so spend time each week doing so. Revenue, expenses and business costs should be recorded as they happen. Better decisions can be made if you know where you stand financially.

3. Budget forwards

To anticipate future cash flows, plot your projected income and expenses until the end of the current financial year. You are then able to measure what actually happens against your actual plan. This tool allows you to adjust future operations to improve your impending success.

4. Manage your time effectively

Time is money and as such time management is a key skill to have. You'll need to prioritise tasks to ensure customers and vendors are kept happy, and also learn to do the most urgent tasks first. Time management will improve the financial side of your business, with yourself and your accountant on the same page and communicating effectively.

5. Scrutinise your costs

Keep a close eye on your costs, whether it be essential sunk costs or general expenses - utilities, printing, stationary etc. - and instil an effective approval process for internal purchasing.

6. Secure your revenue

The following are two simple steps you can take to reduce the risks of late or no payment. Firstly, confirm with the client when they will receive an invoice, stick to what was agreed and clearly state the payment terms on said invoice. Secondly, be prepared to compromise if the client is struggling with payment. It is normally better to wait a few months than proceed straight with legal action.

7. Plan carefully for the year-end

It can be a daunting task to go through all your financial documents come end of year. To make the task easier, perform a month end. This involves filing away all invoices, remittances, receipts and any other accounting papers in chronological order. Doing this will make everything ready for retrieval and the heavy demands of completing year-end accounts won't bring your business to a standstill.

8. Turn to technology

Make use of the available technology to easily keep track of income and expenses, set reminders and alerts, keep up to date with day-to-day business efforts, and manage workflow.


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