If you are not automating your process, then you are losing a lot of opportunities for growth and reducing your chances of achieving business success.
It is essential that you have a positive cash flow and waiting for payments could hurt your business. When you automate processes for invoices and payments for example, you reduce a significant amount of time to collect cash, keeping your business fueled.
2. Backup and secure your data
Invest in a good software. The last thing you would like to happen is to lose all your financial data.
Always make a secure copy of all your data files. When you perform backup of your financial data, the copy of your data file is encrypted that makes it useless for anyone interested to steal it.
But most cloud-based systems perform automatic data backup.
3. Consult with a pro
Most small business owners wear multiple hats. But it is best to consult with the pro to make sure you are doing things correctly and avoid any future problems.
Professional financial advisors and bookkeepers are not just good in figures and financial record keeping. They are knowledgeable in the practices and regulations that you need to comply in order to better shape up your business for success. They can offer you sound financial advice keeping in mind the best interest of your business.
4. Hire help
The sooner you get help, the better for your business. Outsource tasks so you can better focus on growing your business.
We all have areas of expertise. You may have a solid experience in business and be exceptionally good in management and sales. But bookkeeping are for professional financial advisors and bookkeepers with combined financial skills and knowledge in state and federal reporting regulations.
5. Record correct data daily
Daily recording of financial transactions is an important bookkeeping practice. Correct recording is altogether crucial to your business.
Ensure all your data are recorded correctly. Incorrect data recording means generating unreliable financial statements that does not reflect the true financial health of your business. You should correct any error in your bookkeeping records immediately upon discovery.
6. Regularly check outstanding payments
If you run your financial data on automated bookkeeping system, you can simply set a reminder about any outstanding payments.
Ensuring that you get paid is another essential practice for small businesses helping maintain business financial health and grow your business. Surprisingly, many small businesses fail to track payments due. If you are doing things manually to collect payments, you could miss on a lot of payments that bring losses to your business.
7. Regularly analyze your business performance
You can do this monthly, quarterly or yearly. Preferably, you sit down with a professional financial advisor
to discuss the details of your numbers and identify opportunities for growth. It is also important to have your financial advisor's perspective on the business trend and what your financial statements are telling you
Are you achieving your gross profit goals?
Is your revenue going north or south?
Do you need to cut down expenses or skip major purchases?
Do you need to apply any modifications to your financial plan?
8. Run cash flow report
Your cash flow is the life of your business. If and when you run out of cash, all your business activities are suspended.
It is ideal to run a weekly cash flow report. This practice updates you on your daily business transactions and allows you to make any necessary adjustments.
9. Track your monthly income and expenses
Are you earning any profit? Or, are you spending too much? You need to monitor your monthly income against your total expenses.
Save receipts. Open a separate business credit card. Tracking your monthly income and expenses is also important for tax purposes that you will need to prepare at the end of every year.
Creating a habit of performing the essential bookkeeping practices can be challenging.
There are too many details to take care of and it’s easy to choke in the daily recording and reporting tasks while managing all other areas of the business.
Remember you have a business to run!
Get help. Delegate daily tasks for you to better work on your business and not in your business, driving long-term business success!