How to make the best of your business finances.

Finances for any small business can be difficult to manage, especially in the early days and cash flow becomes one of the biggest worries for any business owner. There are a number of ways that you can help alleviate some of these pressures:

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Make sure that you complete a regular cashflow forecast either by yourself or have your accountant prepare one for you. This will help you make targets for both your sales and expenditure for the future six or even twelve-month period. You can do this in the simplest way possible and have all of your projected income and expenditure logged onto a spreadsheet or you can utilise some of the reporting features in any of the cloud accounting software that is available. Cheltenham Accountants can help you with preparing forecasting documents and can help with a variety of other accounting needs as well.

One thing you can do to help predict your future expenditure is to consider having items that you pay for each month put onto standing order or direct debit. This helps you know that there will be a set cost coming out each month and also helps prevent you from having to pay any late payment fees if you forget to pay the bill each month.

Another way you can help your cash flow is to make sure that you regularly send out your sales invoices. As soon as you can invoice for work you have completed (this will depend on whether you pre-charge for work, ask for a deposit or issue following work completion), as the sooner the invoice is out the sooner you will start seeing money coming in. This is crucial for your cashflow.

If your business carries stock, this is another area that an accountant can help you with, as you want to be turning around your stock in as short a time scale as possible as items sat in your warehouse aren’t going to be bringing you in any income. Equally if you can make sure that you are only spending money that you need to you will find that your expenditure becomes more manageable. It is a good idea to go through your expenses on a quarterly basis and just review the payments you are making and whether you are making the most out of the item you are paying for.