Whether you’re a small, medium, or large-size organization, managing your business finances has never been more important – especially in these current economic times. By successfully managing your finances, you can have peace of mind knowing that one of the most fundamental factors underlying your business is under control.
Since 2020, many businesses have been struggling financially as they attempt to balance their books and get a steady cash flow. If you’re one of these businesses, there’s no need to panic, as you have plenty of time to turn the situation around.
Fortunately, this guide has a selection of tips that are designed to help you manage your business finances like a professional company. Best of all, these tips are low-cost and easy, meaning you don’t need to worry about any potential complications along the way.
Use EFT Payments
EFT payments are incredibly useful for businesses who want to get paid on time with minimal delay.
What is an EFT payment?
In a nutshell, an EFT payment is an electronic transfer of money from one account to another – simple. These types of transactions require no middleman, such as a bank employee.
Due to the digital nature of EFT payments, businesses have much greater flexibility when it comes to sending and receiving payments. For instance, it’s much easier to receive payments from clients in different countries to you.
If you’re interested to learn more, MYOB can tell you more about the different types of EFT payments and how they can benefit your business over the coming decades.
The more knowledgeable you are about digital transactions, the better.
Consider Business Loans
The prospect of business loans can be scary for a lot of owners who fear being stuck in debt forever.
However, business loans aren’t scary at all – in fact, they’re almost an essential for businesses who are looking to get off the ground and take some pressure off their current finances.
Very rarely does a business become successful without taking out one or multiple loans from a bank. This is especially true in an age where start-ups need loans to start making positive moves within their industry.
If you take a look across Europe and Asia, for example, you’ll see that business loans are becoming increasingly popular.
In the UK, there are government-backed loans that are specifically designed for small businesses and start-ups. As a start-up in the UK, you can get a loan of £500 to £25,000 so that you can start or grow your business, which is incredibly useful. This money can be funnelled into all sorts of business aspects, from marketing to sales.
When loan money is used efficiently, it allows businesses to thrive until (eventually) they can start to pay it back. Before long, if your business is successful, you’ll be able to pay off your loan entirely if you decide to take one out.
However, it’s important to note that (in the current economy) many small businesses are being refused loans. If this happens to you, don’t give up, as you’ll eventually find a bank or company willing to help you.
Use Payroll Management Software
If your current payroll system is still reliant on the traditional paper and pen method, then it’s time to modernize.
Now, millions of companies around the world are using what’s called payroll management software.
Essentially, this is an application that administrators can use on their business devices to effectively control the payroll. Some of the benefits of this include:
- Payment Automation
- Faster calculations; from monthly bonuses to holiday pay
In an age where employees want to be paid accurately and on time, it’s highly recommended that you use payroll management software if you want to manage your business finances better.
When it comes to choosing payroll software, you can either choose a free-to-download program or pay a monthly subscription for higher-quality software. Make sure you only choose software that’s within your business’s budget.
If you have no in-house accounting specialist, then it’s an excellent idea to outsource your accounting to a separate company. Or alternatively, you can pay a freelance accountant to come into your office on a flexible basis.
Whatever you do, don’t leave your accounting to a non-expert, as this can lead to all sorts of problems further down the line. Even if you’re a start-up business, you need to have a professional accountant onboard – otherwise, you’re going to struggle, and your books will quickly become a mess.
Have a Business Credit Card – Don’t Use Your Personal One!
Having a business credit card is crucial this decade.
Don’t fall into the trap of using your personal card to cover business expenses (or vice-versa, as many business owners make the mistake of using their business cards to cover personal expenses).
When everything is paid for through a single source (your business card), then it makes managing finances and transactions so much simpler. You don’t have to worry about comparing statements or getting confused regarding which card was used to cover which payment. Instead, everything can be managed from a single place – which is incredibly convenient.
Prepare for Taxes
Businesses are required to pay their taxes annually, meaning once per year.
Unfortunately, a lot of owners make the mistake of not preparing for taxes and then getting hit with a surprise tax bill when the time arrives.
This is why it’s important to keep track of your revenue and profit (as well as predicted forecasts) so that you can gain an idea of how much tax you can expect to pay. When you know this, it’s then much easier to put money to the side in preparation.
Doing business taxes yourself can be tiresome, though, which is why most businesses outsource their taxes to accountancy companies to do it for them. All you need to do is provide your representative with documents and statements regarding your business income. They will then calculate your tax payments on your behalf before them providing you with a statement detailing how much you need to pay.