Having gone through a tumultuous period, you would have realised by now the importance of staying on top of your finances. Ostensibly businesses that have prevailed to date possessed the financial resources to see them through the latter half of the current financial year.
And perhaps the various financial assistance dished out by the government has helped too. It’s anybody’s guess when the next unprecedented challenge will arise. As such, it makes perfect sense to be in a state of readiness and stay on top of your finances. Let’s look at 3 things you can do.
1. Get your accounting act right!
You’ve heard this advice countless times. Yet, many small businesses treat accounting as nothing more than just compliance. A well-maintained set of books is liberating. At its most basic, aside from compliance, it’ll tell you how much money you’ve got and how you can use them. When it comes to finances, never let your decision be driven by gut feel or instincts. Your accountant is a better resource to turn to. Invest in a good accounting firm as well as cloud-based software.
2. Track your expenses
It’s nice to focus on making money. To see revenue rising month to month can energise and enthuse you. But have you ever wondered how much it cost the business to generate the revenue? If you’ve not been tracking your expenses, chances you don’t have the answer to this question. Sometimes, the cost of business tells you more about the business’ viability than revenue. Unless you are profitable, the business isn’t sustainable. Start tracking your expenses. Effective and efficient bookkeeping holds the key to this.
3. Calibrate your business plan and projections regularly
It’s rarely plain sailing. There will be headwinds and crosswinds. Like a good sailor, you’ll have to adapt to these changes accordingly. It’s perhaps improbable now to launch your second outlet or expand to a new market. That’s fine! Make the necessary adjustment to your business plan to avert a potential financial crisis.
Keen to learn of more steps to stay on top of your finances? Connect here.