How To Have A Strong Financial Control In Your Business

Common Reasons Why Businesses Fail

One of my favorite commandments for small business owners is having a strong financial control. This applies to you also even if you are not a business owner. So, whether you are in business or not, my advice is always simple. Spend less than you earn and keep a money diary. This is one thing many people struggle with. It doesn’t matter how great your idea is, if you can’t keep the cash flow of your business, your business will die. This article will give you some tips on how to have a strong financial control in your business.

Most people treat their business like a piggybank. You cannot afford to do this if you are serious about building a successful business. Also, you need to develop smart money habits right from Day One,. This ensures that good financial management becomes an integral piece of your company’s culture.

Have A Working Budget

In addition to having a budget, you need to ensure your budget aligns with the resources you need to achieve your business objectives. Your budget is something that you have to revisit often. Cultivate the habit of reviewing your goals, probably weekly, and then make necessary adjustment. If you are not meeting your goals, it could it be because you are running too thin in that area. To fix that, you may need to pull budget from elsewhere. This is why you need to have a working budget.

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Take Charge Of Your Cash Flow

Depending on your product or service, you need to take charge of your cash flow. If your service or product requires subscription, consider offering an incentive to your customers to pay ahead annually. For other types of services, you can offer a discount to your customers for paying in full at time of purchase instead of invoicing. In addition to this, establish accounts receivable guidelines and collection timelines. This helps to ensure money continues coming in when you expect it.

Hire An Accountant And A Tax Professional

If you are just starting out in business, this is one place you don’t want to skimp. You need to ensure that you are always up to date with your financial records. This ensures you don’t experience any stress in the future from the government when it comes to your tax records. If you want to automate your bookkeeping and keep this in-house, consult with a tax professional who has direct experience with early stage startups.

There are different software you can use to automate your bookkeeping. Freshbooks is a great choice for consultants and service-based startups. It has time-tracking features and other tools to help you track the costs within your projects. Another one that is common is QuickBooks. It has richer reporting and is pretty easy to scale. Aside these two, there is also Sage, Zoho, Xero and more. So, before you decide on the software you will use, ask for recommendations from your accountant.

Use Software To Automate Some Of Your Tasks

Automate every single thing that you can. Any task you can automate is more time you are putting back into your business. Remember the saying, “time is money”. MailChimp or Mailerlite can be used to store contacts send emails and track results. You can use Help Scout to automate several functions for your entire team. Whatever you need done, you will be able to find a software that can do it for you. Don’t let the monthly or annual licensing fee scare you off. Take it as part of the costs to doing business.

READ ALSO: 14 BUSINESSES YOU CAN START WITH LITTLE OR NO CAPITAL

Place Yourself On A Salary

Don’t make the common mistake of confusing revenue with profit. Most early-staged business owners make this mistake. There is difference between revenue and profit. The fact that you have money coming in doesn’t mean you can spend it on yourself. Br disciplined and place yourself on a salary. Resist the temptation to spend the money from your business on your needs.

Finally, seek to learn more about your business. The more you know about your business, the higher your chance of success. As your business make money, keep track of your income and expenses. This helps you are able to have the resources required to feed the growth of your business.

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About Dotun Ayodele-Bamisaiye

Engineer turned Accountant, twice designated to boot. Now I just love to help.

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