Top Tips To Improve Your Financial Management

Top Tips To Improve Your Financial Management

on Oct 12, 2021 in Small business

Financial management is an essential skill for business survival and growth. It takes planning, organising, control, and monitoring your financial resources in order to achieve your business goals. 

Good financial management will help your business to better use resources, fulfil commitments, get a competitive advantage and prepare for long-term stability. 

Financial management should be part of the key processes within your business and in your ongoing planning. You might feel that your finances are too complicated and confusing, but these tips will help you to get control. 

Have A Clear Business Plan

A business plan will establish where you are and where you want to go. It should include how you will finance your business, such as with help from, what money you need and where that money will come from. 

Monitor Your Finacial Position

Monitor the progress of your business. Every day, you should know how much money you have in the bank, how many sales you’re making, and your stock levels. Every month, review your position against the targets you set in your business plan. 

Make Sure Customers Pay You On Time

Businesses can get into a real mess because of late customer payments. To reduce the risk of late payments, make your credit terms and conditions very obvious immediately. Issue your invoices promptly, and make sure they’re accurate. Using a computerised credit management system will help you to keep track of customers’ accounts. 

Know Your Day-To-Day Costs

Even the most profitable companies can get into difficulties if there isn’t enough money to cover the day-to-day costs, like wages and rent. You should be well aware of the absolute minimum that your business needs in order to survive and make sure you never drop below this.

Keep Up-To-Date Accounting Records

If you don’t keep your accounts up-to-date, you could easily lose money by failing to keep up with late customer payments or not knowing when you need to pay your suppliers. Using a good system to keep records will help you to track your expenses, debts, and creditors. It will also help you to apply for more funding if you need it, as well as saving time and accountancy costs. 

Meet Tax Deadlines

If you don’t meet the deadlines to file your tax returns and payments, you can incur fines and interest. These are costs that easily be avoided if you plan in advance. Keeping accurate records will save you both time and money, and you can be confident that you’re only paying the tax that you actually owe. Make sure you meet your obligations. 

Become More Efficient And Control Overheads

Is your business operating at the most efficient level it could be? Saving energy and money can be done by implementing changes in your behaviour and using the equipment you already have in a more efficient way. This is one of the easiest ways to save money. For most offices, you can look at your use of heating, lighting, office equipment, and air conditioning.

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