If you’re serious about improving your business this coming year, it’s essential you get a handle on the numbers. Here’s by guide on how to manage your business finances.
There are two main reasons to manage the finances of your business.
1. To comply with your legal obligations to HMRC and Companies House.
2. To ensure you achieve your objectives.
Every business must make enough money to sustain activities and fund growth. As the owner you can either leave it to chance, or you can manage the process.
In order to manage the process you need to:
Monitor your progress, and
Make informed decisions.
Financial management is not about “doing the accounts”, although you do need to do them in order to have accurate financial information. It is all about using that information to ensure you understand how you’re performing now, decide what you can do in the future to improve that situation and make sure you achieve the desired outcome.
The first step to good financial management is to understand your current financial situation, regardless of whether that is a good or bad picture!
It can be quite daunting to sit down and do this, but it’s the first rule of good financial management – take care of the cash. I’ve created an e-book which takes you through:-
– How much spare cash you have in the business (or personally)
– Your total monthly spend – what is the absolute minimum amount of cash you need to bring in to survive.
– How long your spare cash will cover your monthly spend.
– How quickly you need to bring in the sales & the value of those sales.