Approximately 33% of new businesses will survive 10 years in operation. One of the most common causes of small business failure is financial mistakes. Failing to focus on keeping your business financially healthy can result in a number of disastrous situations arising. Rather than starting out on the wrong foot, you need to start managing your small business finances immediately.
In most cases, new business owners will need to seek out the counsel of professionals when trying to get a handle on their finances. This is a better option than trying to figure out how to perform this task alone. The following are some of the things you should consider when trying to manage small business finances.
Hiring an Accountant is a Great Idea
When trying to manage your small business’s finances, you need to realize your limitations. Unless you have experience in the accounting or financial industry, you will run into problems when attempting to do this work on your own. This is why hiring an accountant to help you out is a great idea. These professionals will have all of the tools and experience needed to adequately manage your finances.
If you are attempting to boost your credit in an attempt to get approved for a small business loan, an accountant can help you remove hard inquiries from your credit report. As time goes by, you will realize just how valuable a knowledgeable accountant is. Before hiring an accountant to help you out, take the time to research them online. With a simple online search, you can find reviews from existing and former clients an accountant has. With this information, you should be able to decide whether or not a particular accountant is the right fit.
Assess Your Financial Health Monthly
One of the biggest mistakes you can make as a business owner is taking your eyes off of the financial side of your company. Some entrepreneurs think they can get by just checking their financial position once every six months or so. In reality, your financial health can go south in a matter of weeks. This is why you need to closely monitor your monthly financial reports.
If you are looking for a way to make reviewing these documents easier, then you may need to invest in cloud-based accounting software. Programs like QuickBooks allow you to view financial records from anywhere. One of the best parts about using this type of software is the security they offer. When using a reputable cloud-based accounting software program, you will not have to worry about sensitive financial data being compromised. You can even further automate the process by integrating your accounting software with an AP solution like GetYooz.
Create and Follow a Budget
Being financially reckless can come back to haunt a business owner. When first starting out, most business owners fail to realize how the bad financial decisions they make now will stick with them for years to come. Rather than dealing with these problems, you need to avoid financial mistakes by setting a firm budget. Keeping track of all of the money coming in and going out of your business can be beneficial.
Not only can a budget help you see where the money is being wasted, it will also allow you to save money to fund future growth. If you are unsure about how to create a budget on your own, working with your accountant is a great idea. They will be able to create a customized budget designed to fit the needs of your small business.
Keeping Your Business Financially Sound
As you can see, adequately managing your small business’s finances is no easy job. With the right tools and some professional guidance, you can keep your business on good financial footing.