Unless you’re an accountant or bookkeeper it’s probably fair to say that the financial side of running your business isn’t your strongest skill. You only need to watch the entrepreneurs on Dragons’ Den crumble as they try to remember their figures to know you are not alone here. Having financial expertise is becoming more and more important.
However, money is the lifeblood of your business. The quicker you learn the basics and get used to managing it, the healthier your business will be (and the lower your stress levels).
Here we look at five ways to boost your financial expertise to give you a better chance of staying in business...
1. Understand your cash flow from the start
Your financial knowledge starts with the financial projections in your business plan. How much money do you have to invest in your business? How much are you going to charge so you cover your costs and make a profit? What are your monthly outgoings? The planning you put in at this point will be invaluable and ensure you are taken seriously by investors, suppliers and customers. This is an area you should consider talking to your bookkeeper about to make sure the plan is correct.
2. Get to grips with tax
www.gov.uk or your bookkeeper can both give you advice on which taxes you need to register for and when you need to pay them (whether you’re running a limited company or self-employed). Tax returns can be completed online by registering for a Government Gateway account; you can set up email alerts so you don’t miss any deadlines.
You can access HMRC’s business advice by following them on Twitter and YouTube. Of course if you don’t have time or the confidence to do it yourself then outsource it to a bookkeeper.
3. Think like a consumer
Treat your business finances in the same way you do as a consumer. Shop around for the best deals on bank accounts, credit cards, utilities, insurances etc.
4. Choose the right bookkeeper
Getting professional advice from a bookkeeper from the start can be the difference between the success and failure of your business and will save you money in the long run. You can choose varying degrees of support, from just doing your tax returns to more hands-on bookkeeping. It isn't important for them to be local to you if they use cloud based software (it can often be cheaper).
5. Investigate useful accounting software and apps
As much as we’d all love to pay someone to take care of the financial aspects of running a business, budget limitations can mean you need to do a lot of it yourself, especially in the early days. This is where accounting software and apps are invaluable. Just like when you work with a bookkeeper, you can scale up depending on what services you need, such as creating invoices, running payroll, tracking expenses and managing VAT. The more sophisticated packages will plug into your bookkeeper’s software as well.
If you’re still struggling with your financial expertise then get in touch with JGBC to find out how I can help you ace your accounts.