You’ve had a great idea for a business and you’re now a small business. Congratulations!
Now you’ve got to get your head round the figures and balance the books to ensure you’re a financial success and fulfilling statutory obligations.
Here are some tips to successfully manage your finances, at whatever point you’re at in your business journey:
Understand basic accounting
Your accounting software will show various financial statements. Having a basic understanding of standard accounting will help you figure out what statements and balance sheets mean, to help you understand your business better and what you need to focus on to grow and be successful.
Maintain records so they’re always up-to-date
If you don’t keep clear records, you may end up paying more tax than you need to. Up-to-date information allows you to make better decisions, review progress, keep track of how much cash you have to pay yourselves and staff, and means there is less hassle later on trying to tie up loose ends. It is particularly important to keep a log of costs and allowable expenses, and spending a few minutes a day or week can save you hours come year end.
Create a budget and keep track of it
A budget is an estimate of your expected expenses and income so you can predict your future cash flow. If you create a monthly budget until the end of the financial year, you can update your budget when figures come in and so you can monitor your financial progress and make any necessary adjustments to improve your performance.
Monitoring your costs, even small costs, can help your profitability. Tracking your expenditure can help you spot areas requiring efficiency or indeed what you need to cut down on (business coffees?!)
Set aside money to pay taxes
You want the ATO to love you of course! Putting money aside for paying taxes is important so you avoid additional interest and penalties for missing tax. Adopt a prudent financial routine where money is held, ready to pay taxes and e.g. ASIC fees.
Keep track of customer invoice payments
Your invoices power your cash flow! Ensure your bills are paid on time by sending reminders and chasing late payments.
Hire a reputable accountant / bookkeeper
We at MSI Taylor know that organising and understanding all the financial fine details for your business can be daunting. What accounting software should I use? How do I use accounting software? How do I do BAS lodgements? What allowable expenses are there? All these questions and more, we can help ensure you have the right tools, the right advice, and the right support.
No matter how big or small the task, hiring us is a great way to cut down your workload so you can get on with running your business. The right accountant will not only help you set up your start up, they will be there for you on an ongoing basis.