Staying in control of your finances can be one of the most demanding aspects of running a small business.
At North West Business Training, powered by Burnley College, we know success hinges on effective and efficient financial management. That’s why we’ve created this guide to get you and your team crunching those numbers with confidence.
What is financial management?
Financial management is a term used to describe all the processes that contribute to keeping your business’s financial activities running smoothly.
This can include strategic planning, organisation of assets, and reporting of funds.
Proactive financial management is key to boosting your business and maintaining healthy relationships with your clients.
Here are the three key areas of your finances you should be keeping a close eye on:
- Budgeting & Cashflow
A budget is the blueprint for your business.
It’s where you track your expected revenue and expenses across the financial year to support the decisions you make about how to allocate your resources effectively.
A cashflow statement should sit alongside your budget, allowing you to keep an eye on the cash that is actively coming in and out of your business each week.
It can also be useful to consider your payment terms carefully. While offering your clients the option to pay 7, 14, 30, 60 or even 90 days later for your services can be an attractive option for building trust, it can also directly impact how much you’re able to reinvest.
Take advantage of cloud-based accounting software, such as Xero, QuickBooks and Kashoo, to streamline your banking processes so you can focus on spending more quality time with your clients.
- Financial Forecasting
Creating a clear financial roadmap is key to securing success for your business’s future.
Collaborating with your team to assess the current financial conditions in your industry and identify opportunities for growth and development will help you maximise your potential.
Accurate, detailed forecasting will also make paying your monthly and annual tax bills a breeze. Remember that as an employer and/or employee you’re responsible for paying corporation tax, VAT and National Insurance contributions on time.
Learn more: https://www.gov.uk/browse/business/business-tax
- Risk Management
Every financial decision you make as a business owner comes with a certain level of risk.
The good news is that there are steps you can take to protect and future-proof your business by mitigating those risks!
This includes diversifying the investments which fund your daily activities, purchasing insurance for larger assets like specialised machinery and IT equipment, and engaging in frequent market research to make sure you’re aware of particularly volatile issues within your industry.
Taking the Next Step
If you’re ready to supercharge your financial management skills, North West Business Training is here to support you.
Explore our wide range of training programmes and discover how tailored support can provide you with the tools to thrive.
With the right strategies, you can stop getting stuck with spreadsheets and start leading your business confidently into the future.
Contact our team: [email protected]
