We’re not going to misinterpret or overcomplicate the fact that as a small business owner; organising a strong financial structure and backbone to your company is one of the most important and imperative activities that should be taken within your business. Once you’re all set up and ready to go, your attention should immediately be focussed with your company’s finances.
In order to offer what we believe is good advice and sincere information, we’ve compiled a series of guidelines to follow to ensure you’re in a strong position to be able to plan, forecast and execute financial decisions.
Citing clear and concise financial objectives
It’s highly likely that in the initial stages of your running a company, financial savings of capital are going to be fairly non-existent, and revenue will be reinvested into a company to ensure strong development. This scenario almost goes without saying, but it’s key to set specific goals on how and where this where will be reinvested. Questions do need to be asked, such as has this really been thought through, and are you over or undercompensating? Certainly key points to think at this point.
A specific example being (albeit an obvious one) is that you will have to manage your cash flow rigorously, to ensure that your company will stay solvent. This may sound somewhat pessimistic in referencing, however it cannot be neglected.
Keep a healthy cash flow
Now this has already been mentioned earlier, but we’re keen to reiterate that steady cash flow is the livelihood of any company of whatever size, and you should ensure that money is available to be reinvested. Particularly at the initial stages of your company’s life, referring to the phrase ‘standing still is moving backwards’, is key as momentum needs to be generated and continued. It’s ideal to focus on the key aspects such as; improving receivables, managing payables and surviving shortfalls. Timing is of course crucial.
Meticulously tracking expenditure
This is where Perfecto software really steps in. Luckily as a small business owner, your hands are not tied in the sense of that if you don’t have the resource or time to fully take control and manage your accounts, then there are alternatives options available. An emphasised self-service platform to manage this is available with Perfecto’s software, and it has truly never been easier is manage and plan. This model ensures that no stone is left unturned, and you know exactly where you are, at any given time.
Steering clear of bad debt
A big, and unfortunately common challenge within manages finances is avoiding bad debtors, and dealing with bad debt in general. Setting up or managing an effective credit control system is an essential part of reducing the risk presented to your business by bad debt. The main focus and purpose of this being finding the balance between ensuring that your business receives payments in a timely manner, and keeping your customers happy.