6 simple finance tips for your small business
It’s here! June. The 6th month of the calendar year, and the final month of the financial year. I know that many of you have had enough of money matters this month, so I’ve decided to keep it simple and share 6 quick and easy tips to help your business finances stay on the right track heading into the new financial year.
Make a budget and stick to it
It sounds straightforward, but sticking to your budget is one of the easiest ways to ensure that your bottom line stays in the black. Having a realistic budget prepared for the coming year and beyond is an essential component of managing your small business finances. So before you make any spending decisions, check the budget, and if the budget doesn’t allow for it, make another plan.
Review your costs regularly
Keep a close eye on the monthly and quarterly expenses of your business. Wages, marketing, inventory, sales commissions, rent – it all adds up. Analyzing your business costs on a regular basis will allow you to keep track of your spending and, as a result, you’ll know where and when to cut back if required.
Send invoices promptly and remember to follow up
Get into the habit of invoicing as soon as a service is provided. Aim to secure a deposit where possible, and ensure your terms and method of payment are clearly stated. Most accounting software will allow you to set up automatic reminders for unpaid invoices, so reduce late payments by sending reminders prior to the due date. And as much as it can be tempting, don’t put off making those late payment phone calls.
Keep a business emergency fund
If there’s anything we’ve learned recently it’s ‘expect the unexpected! Having a business emergency fund will allow you to better navigate the rougher waters, should they arise. This fund is not to be used to purchase any non-essentials that aren’t already in the budget! But it will be a big help if you’ve ended up with a larger tax bill than you’ve allowed for, or if there are a few more overdue payments than you’d planned.
Prepare for tax time
One of life’s dreaded certainties, tax isn’t just a concern for June or when preparing your BAS. Keeping informed of changes to tax legislation will allow you to claim maximum expenses, so you’ll avoid paying more tax than you need. Keep accurate records and put tax money aside year-round. If you’re not a tax expert yourself, talk to one throughout the year to ensure that you’re on top of your taxes when the time comes.
Be smart when arranging a business loan
Whether you’re just starting out or long-established, a business loan can be an essential way to grow and develop your business. There are many different business finance options available, and they can be difficult to navigate if you’re not in the know. Arranging a loan through an experienced business finance broker is a great way to ensure that you’re choosing the right loan for your needs, and avoiding any hidden costs.
And that’s all, folks. 6 little tips, all extremely simple, all remarkably effective. I could easily add another 12, but let’s save those for another time. Happy EOFY!
