Running a small business means being focused on your finances. Without proper management of accounts receivable, marketing costs and even debt, you may end up sinking the small business before it even starts to grow. Fortunately, there is always something you can do to ensure that such risks are prevented. You can create and implement simple accounting strategies to save your business and help it grow to its full potential.
1. Weigh your options
Is it better to get an accountant, or can you handle accounting yourself? This is the question you should start by asking yourself before anything else. Reducing costs is definitely what you prioritize as a small business, but help manage what you can and let experts do what they do best. You can hire accounting services to help you get your finances in order without spending too much on the services. There are many accounting firms today and most offer all kinds of affordable accounting services so you can easily get what you need as a small business.
2. Separate accounts receivable from borrowed funds
Financial aid or loans are beneficial for small businesses to help with marketing campaigns and even capital among other things that the company needs in the initial stages. Get organized and keep the loans separate so that they do not appear in your receivables, because then you can easily confuse what is yours and what you have to pay back. There is very good user-friendly software you can use for this task to keep everything organized and clear to you.
3. Keep an eye on your balance sheets
Large amounts on your receivable column may be a good thing to indicate that your business is doing well, but it is another matter when the money does not end up being reflected in your business account. Customers can be difficult and can avoid payments, and when this happens regularly, your business remains at risk. Apply strict policies or terms so that you are able to receive overdue payments at the right time. You may be desperate to get customers, but you can’t do it at the expense of your growing business; if you refuse to provide more services or materials until pending payments are made.
4. Keep track of your daily expenses
Daily expense registers are very important for all types of business, but more so for small businesses. Keeping track of your daily expenses not only helps you know where your money is but also gives you a better position to budget for the coming weeks.
5. Know your minimum monthly earnings
Even the smallest businesses require driving strategies, and when you have an accurate system in place, you’ll be able to keep things in order. Calculate your expenses and regular obligations so that you know the required minimum income each month. Have a goal in terms of how much you need to earn each month so the numbers don’t get too confusing.