You’ve recently set up your first business, it’s been registered, and you’re even starting to see some customers come in. So what’s your next move? Do you sit back and what for everything to fall into place? Unfortunately any business, not just a new one, needs constant management. So now is the time to think about how to manage it all, and financial management is the first and most important practice to get into to ensure the success of your business. Together with Hippo.co.za, here are the basics of managing your business finances.
Get a business bank account
Separating your business and personal bank accounts is a must. Apart from helping you figure out which transactions are purely business related and therefore how well you’re doing, it will be far easier to complete your tax forms when the time comes. With both your personal and business transactions in one account, it will become increasingly difficult to separate what was spent on the business and what wasn’t, or what the business gained or didn’t.
Speak to your bank about opening up a business account and what forms you might need to supply. The documents most commonly asked for are business registration forms, and ID. You will also need to deposit a certain amount of money upon opening the account.
Keep your books in order
Keeping your accounts in order helps you assess whether your business is profitable or not, and keeps an accurate record for when the time comes for you to be audited. If your accounts are not in order, you won’t have a clear idea of how well you’re doing, and you will have to scramble to get it all in order and on record before an audit.
Keeping your accounts in order need not cause too much stress. You can hire an accountant or bookkeeper to do it all for you but, if you can’t afford this option, you can purchase an online tool, such as Quickbooks or Pastel, to help you do it yourself.
Offer various payment methods
Unfortunately one payment method, while seemingly simple and easy, isn’t always helpful to customers. Not every person uses the same payment method, and if a customer doesn’t see a method that they’re comfortable with upon checkout, they’re not likely to go ahead with the purchase.
Implementing a handful of payment methods that you know your customers use will ensure that customers who like your brand are happy to and are comfortable with purchasing from you. Whether you operate from a brick-and-mortar shop, or online, or both, there are a number of payment methods out there to choose from. From traditional cash, and debit or credit card, to EFT and even SnapScan, choose a few to offer consumers.
Don’t blow your profit
While it may be tempting to spend a large portion of your business money on office upgrades and equipment as soon as your profit starts to rise, it is vital to have a portion saved for the times when business may be slow or you need to do emergency repairs. Having a savings account will ensure that your business is sustainable in the long-term, and able to withstand slow months.
Save a portion of your profit each month, and you won’t be caught short during times when cashflow is stagnant or you need to do emergency repairs to your office building, equipment or assets. While you might already have measures in place, such as Business Insurance, to protect your assets financially, it never hurts to put money away for a rainy day.
Regardless of whether your business is new or old, getting the hang of these habits will provide you with the basics of financial management that is vital to your business’s success. If you’re trying to figure out How to Make 2018 Your Year of Financial Liberty, get a business bank account, keep your financials in order, implement a few different payment methods, and always save a portion of your profit.