As a business owner, you want to have time to run and expand your business, instead of spending hours over the minutiae. Here are a few tips that will help you keep control of your finances while saving some time too.
Having enough cash for small expenses
At the moment, we operate a small business, and as a rule here, small businesses can’t have a credit card, so every time we need cash, we have to go queue at the bank in order to cash a check. It gets old pretty fast. Thankfully, we also have a safe, where we keep a little bit of cash so we don’t need to run to the bank every other day.
Withdrawing cash, even if you have a credit or a debit card, takes time, and one more line into your accounts and reporting. So withdraw enough to last you a week, a month, depending of your type of activity, and keep a petty cash box where you can dig in to make a small purchase.
Automate your bills
Spending hours going over the bills and sending checks to each creditor should be a thing of the past. You can now automate all your bills and save a lot of time. That is, of course, if you have enough money in your current account not to go overdrawn, or if you have negotiated with your bank a 0% overdraft. Otherwise the fees may be higher than the convenience.
Let your money make money
Like many small or medium business owners, you may be underestimating the importance of business savings accounts. Interests are at historical lows and have been for quite some time, so why even open a savings account’? because every little counts. If you have your finances in order, you probably have your payroll on standing order and your bills on direct debit, so you know exactly how much money you need to cover your monthly expenses. You can set up an automatic transfer every month, if your current balance is over that amount, so the extra money gets wired into savings. Again, the interest may not be much, but it is money that you didn’t have to make any effort to bring in, so in this economy, it is a real blessing.
Check your accounts regularly
People make mistakes, you may get overcharged for a service, your providers may add fees that you had negotiated to be waved… and your accountant will probably have questions and ask what was this or that purchase. Do you remember what you spent on six months ago? Neither do I. By doing a regular check of your accounts, your memory will still be fresh, and it will take a much shorter time to go over it all than if you do it every few month. Carry a notepad or make a note in your smartphone when you think you may forget about an expense, so you have all the information when it is time to review the accounts.
Jonathan Cowan @ Pensas.co says
Some useful tips in here. I especially like ”Let your money make money’. I’ve worked with a number of small business owners in my career and it always surprised me how many didn’t make best use of their cash in a business savings account.