By Jude 
When you have a business to run, one of the main things that you will always need to be aware of is how you can ensure you are keeping up with the financial side of things. After all, this is going to be vital if you want to ensure that you are actually keeping the business moving in the way you would hope. As it happens, there are a lot of things that you will want to think about when it comes to this, and it’s vital that you are aware of them all.
In this post, we will consider how you can master your business’ finances once and for all by looking into some key concepts and ideas that you are going to need to follow. All of these are important in their own way, so it’s essential that you are thinking about these. Let’s take a look.
Know Your Numbers
This is the fundamental part that you really need to get right if you want to keep on top of your business. You can’t manage what you don’t measure, so you need to make sure that you are doing all you can to know the numbers as well as possible. At the bare minimum, you should know at all times what your cash flow is. That means how much money is coming in versus going out. It is essential, because you need cash in order to continue functioning.
On top of that, you should keep a close eye on your profit margin, which relates to what you have left after expenses. And you should ensure that you know what your burn rate is, which is how quickly you are spending down your available cash. If those numbers are not clear, your first job is to make them so. You’ll likely want to set aside some time each week to review them so you can ensure you are keeping up with them effectively.
Separate Business From Personal
This is a really essential way to make sure that you are keeping on top of your finances in a sensible manner. Mixing finances is one of the biggest mistakes that small business owners make. If you do this, you’ll find that it is tempting to borrow from one pot to the other, which only clouds things and makes it harder to track what’s going on. Plus, you can personally suffer a lot of liability and loss if the business doesn’t do well.
So instead, open a dedicated business account, get a business credit card, and treat your company’s money as separate from your own. It really should be. It makes bookkeeping cleaner, taxes easier, and keeps your liability clear. You will be glad for all that, especially as the business grows and scales up, and becomes more of a complex operation to keep on top of.
Build A Sensible, Workable Budget
Budgets are not about restrictions, despite what a lot of people tend to think. They are actually about control. The more control you have over your finances, the better your business is going to be, so this is a really important thing that you need to make sure you are thinking about. Having a budget set up which is sensible and workable is going to help you to master your business’ finances much more effectively, so this is a really simple way to improve things greatly.
To begin on your budget, map out your recurring business expenses, taking care to include every last cost you can think of. You’ll then want to estimate your variable costs, like marketing or travel. Compare that against your projected revenue, and adjust as needed. A good budget gives you clarity, rather than guilt, and you’ll find that you just feel so much better as a result.
Automate What You Can
Automation is hugely valuable, and there is nothing wrong with making use of it where necessary. Leveraging the right tools to help you with invoicing, payroll, and expense tracking is a fantastic way to make your job easier, free up time and potentially even save some money. Automation has a way of reducing human error, of course, and it saves a lot of time for you to spend on other matters. In a sense, it can be like a financial safety net that frees you up to focus on strategy, and for that reason it can often lead to a much more successful business on the whole.
At the same time, don’t feel as though you need to automate everything. Sometimes the human touch is required, and it’s not simply the case that automation is always the way ahead. But in general, you’ll find that it is a helpful time-saver that is worth considering at least.
Prepare For Taxes At All Times
You shouldn’t wait until the end of the year to think about taxes. Instead, make sure that you are making preparations for it from the very start of the year right through to the end. That is going to be a much better approach, and will help in removing much of the stress from the situation. Set aside a percentage of income every month for taxes, and that way you won’t be caught out when you are trying to stay compliant. Of course, the quickest way to suffer losses in your business is to owe the tax authority money, so make sure you avoid this fatal error.
Ask For Help
A lot of this can be confusing even for an experienced business leader, so don’t be afraid to ask people for help when you need it. You might hire a bookkeeper, work with a CFO consultant, or consider taking a financial literacy course. In any case, whatever you can do to invest in your financial knowledge pays back considerably, so that is something that you are going to need to think about for sure. This is going to help your business greatly over time.