Financial growth can be challenging for all businesses and smaller enterprises can lack a robust financial strategy. Insurance, cash flow and tax planning can help small to medium enterprises grow and adapt to economic changes.
In this blog post, we share some tips on budgeting, investing and bookkeeping to help SMEs better manage their finances.
1. Make a budget and stick to it
Your business plan should include a budget, including starter debts, tax and related fees, product and service costs, and everything related to the expenditure of the business that is upfront or long-standing. Later on, this can also include any potential staff expenditure.
While budgets may seem intimidating, getting it right can make a huge difference to the success of your business.
Once a budget is established, continue reviewing it and adjusting as necessary – we recommend starting with a monthly review before extending to quarterly.
By frequently reviewing your actual spending compared to your budget you’ll have better control over the spending and see where you could be increasing and decreasing your costs.
2. Manage and monitor invoices
For businesses providing services and products, keeping on top of stock, time, and customer payments is essential to ensure that the business runs smoothly and other costs are covered – it’s no myth that an unpaid or delayed invoice can be catastrophic for a business's finances.
The collection of invoices and monitoring payments are expected to be added to your tax deductibles so businesses should constantly be checking that their payments are up to date. To enforce this, we recommend checking out our previous blog – 4 Tips to Improve Your Invoicing System – for more insight on organising your invoices.
3. Invest smartly
Financial management can also extend to how you invest your finances back into your business. With better investment into your team and equipment, you can provide customers with a better service which can ultimately expand your reach to new clients through positive reviews and word of mouth.
When investing in your business, consider improving these assets:
Equipment
The technology used remotely and in the business space
HVAC systems on the business premises
Investing in more sustainable alternatives can help to cut energy bills as well as boost the reputation of your business.
4. Meet tax deadlines
Keeping your business compliant with tax laws is imperative.
If businesses miss tax deadlines or enter incorrect information they can be hit with extensive fines and interest on their bill, which can cause even the most rigorously planned budget to become unbalanced.
By maintaining clear records of your business expenses, you can feel assured that you’re only paying and receiving the tax benefits that you have acquired and minimise the risk of false report fines.
5. Use an accountancy service with a background in business
For business owners that are overwhelmed with the financial balancing act that can come from running a small or medium business, it may be worthwhile entrusting these necessary but often time-consuming tasks to a professional accountant.
This is where One Two One Accounts can help!
We offer a variety of services and will provide the support necessary to ensure that your finances work for you and you can focus on keeping your business running smoothly. With 15 years of experience in the accountancy sector, One Two One is committed to focusing on the best financial advice for subcontractors and small-medium companies across the North East.
Need help with your business’s financial planning? Get in touch today!