Top tips on managing business finances
AT BUSINESS Gateway, Argyll and Bute, its team of advisers can help with a range of issues. Here, adviser Ann Scott shares her top tips on how to manage your finances:
‘Controlling and properly managing your finances is an essential business discipline that will ultimately support your long term growth and development.
‘ You may have turned your hobby or passion into a business which is great, but you also need to earn money. This should never be forgotten so don’t be shy when discussing prices and payment terms, preferably in advance.
‘Nothing kills your cash flow quicker than not getting round to invoicing. Payments made for work carried out is the lifeblood of your business and late invoices can cause delays and increased bank charges so make sure you invoice on time, every time.
‘A mistake that many people make is confusing turnover with profit. Separating business and personal finances is crucial so you’re never tempted to think you’re richer than you are. By creating different pots you’ll find this easier to manage and will keep things in perspective.
‘Ultimately, being financially stable involves a number of elements. It means keeping accurate financial records which is not only important for the overall management of your business, but is key to submitting annual accounts. It’s also good to remember that while an up-to- date balance sheet has to be submitted to Companies House, HMRC and shareholders, it can also be used as a tool to help you analyse and improve your business. Some key points to keep in mind:
‘There are always great deals to be had if you are prepared to negotiate and shop around on a regular basis.
‘Run a tight ship by knowing exactly how much is coming in and going out. If your business is small, you should be able to say on a day-by- day basis how much the business has received.
‘It’s important to choose the right bank for your business. Make sure you know the bank’s interest rates, charges and fees and what facilities are on offer.
‘Looking after your finances also means deciding whether you need funding, where you can find it and how much you might need. We can help you find the right funding avenue for your needs.’
MONEY MATTERS: Business Gateway adviser Ann Scott