Even the most experienced small business owner can benefit greatly from enhancing the way they manage their business finances. New Zealand’s premier accounting professionals Tauranga-based Tutbury & Associates, have put together five useful tips to help you stay on top of your business finances.
Remember to Pay Yourself
Especially in the initial stages the drive and desire to make the company successful will make you want to invest every dollar in your business. However, as a business owner you shouldn’t overlook your own role in the company and should compensate yourself accordingly. Try starting with paying yourself 10% of the earnings. “This is a smart way to set aside money regularly and to test the productivity of your business,” says Kelly Tutbury, Accountant and Managing Director at Tutbury & Associates Limited.
Create a Budget
Having a budget is especially important for small-business owners who often run on a tight budget. Putting in the time and effort to develop and keep up with a small business budget, can streamline the way you manage your business money. A budget allows for deliberate and tactical, long-term planning for everything from current operating costs to potential expansion.
Pay Bills On Time
Much like you would do with your own personal finances it’s important that you pay all of your business bills on time. Over time built up credit card and loan payment late fees can be costly to your finances. “The same goes for your taxes as paying your tax too late or in the incorrect amount can result in severe fines,” adds Kelly.
Once you know when your bills come in, set up monthly reminders on your work calendar or phone, to ensure you don’t miss on paying bills. This is especially important for small business as avoiding late fees could be the difference between ending the year in the red or in the black.
As a small business owner, you know that not everything in business is smooth sailing. Unfortunately, the unexpected does happen and often you’re left needing to cover an emergency expense. Having an emergency fund set up can help you get your business out of a tricky situation. Start by figuring out how much money you’ll need to cover your business and personal expenses for one month and then multiply that by six. Then you will need to make sure you always have that much in your emergency fund.
Seek Professional Advice
Remember that you don’t need to do it all alone. Receiving help from trained and experienced professionals can ensure that you are on the right path or give you steps you need to take on how to better manage your small business finances. “Getting financial help is a smart business decision that will benefit your business both in the short and long term as it will give you a better idea on how to best manage your finances which will save you time and money,” advises Kelly.
Accountants, in particular, will know all the ins and outs of business finance and will work hard to find you more deductions and tax savings. Not only that but they will also ensure you remain penalty-free and don’t get yourself into trouble unintentionally when it comes to taxes.
Contact Tutbury & Associates Limited:
Phone: 07 576 2194
Address: 23 Myres Street Tauranga