Unless you’re an accountant it’s probably fair to say that the financial side of running a business isn’t your strongpoint. 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 important.
However, as money is the lifeblood of business, the quicker you learn the basics and get into the routine of managing it, the healthier your business and stress levels will be.
Here we look at 6 ways to boost the financial expertise of your business.
Financial expertise tip #1 – Understand your cashflow from the start
Your financial expertise 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. Use this guide from Hiscox to create a budget for your business.
Financial expertise tip #2 – Get to grips with tax
www.gov.uk has 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 made online by registering for a Government Gateway account and you can set up email alerts so you don’t miss any deadlines.
Financial expertise tip #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 etc. Moneysavingexpert.com keeps a list of the current best deals.
Financial expertise tip #4 – Choose the right accountant
Getting professional advice from an accountant from the start can make a massive difference to the success 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. Make sure you interview enough accountants to get an idea of how proactive they will be in saving your business money and find someone you can trust. It may not be important they are local to you but they should have experience in your industry and company structure. There’s an extensive list of what to consider when choosing an accountant on the CCAB website.
Financial expertise tip #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 mean you need to do a lot of it yourself, especially in the early days. This is where accounting software and apps are invaluable. As with an accountant 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 accountant’s software as well. Fundera Ledger has done a comparison of the top 6 small business accounting software and a list of the best finance apps for small businesses.
If you’re still struggling with financial expertise then there is Government support available. Head to the newly created British Business Bank for advice on types of finance and where they are available or the Business is Great website for support and advice on growing your business, including a free consultation with an ICAEW chartered accountant to talk about your business plans.