How to Manage Your Business Finances and Save Money
Assessing and keeping track of your company expenses is crucial to keep your business ship afloat. Every year, your business must meet new challenges that represent an essential part of your budgets. Therefore, the control of expenses is always crucial to be able to reap success at the end of the year.
To save money in your business, financial analysis or a health check can diagnose some or all of these issues with your business finances. Here are some tips to manage your business finances and save money.
Each company has multiple expense items. If you have not already done so, you should create a table that includes the monthly costs for each item and as well general expenditure. Based on this table, you can formulate goals and targets, and determine the future conditions.
For managing accounts, you can also find a trusted accountant or use good tax software such as UltimateTax to keep you in control of your accounts and tax returns. Good accounting software also helps you to keep track of all austerity measures, and such software can make your business more cost-effective and analyze whether the changes are bearing fruit. In addition to these benefits, possible billing errors become visible, and you can alter them before damage is done.
Communicate By Email And Skype
There are certain communications that you have to do by mail, but many announcements, reports, bulletins, and memories can be sent by email. This way, you will save a lot of money on paper, ink, envelopes, and stamps.
A telephone bill can be one of the worst surprises at the end of the month. Avoid such bills by using messaging apps and ask your partners, customers, suppliers, and employees for their username. Connect with them, and your calls will be free! You can make video conferences or only use the audio feature if you prefer. You only need a reliable internet connection and your computer or compatible smartphone.
Share An Office
Renting an office is often expensive, especially in exclusive areas. The solution may be to share an office. Not only is the space cheaper, but you can also share the costs of the photocopier and common areas, stationery supplies, and even essential coffee supplies.
Minimize Travel Costs
Business trips are usually very expensive. If you travel by car, you have gas costs and maintenance. Air travel, which also includes hotel and restaurant expenses, adds big bills. Besides money, you lose a lot of time on trips, which is the time that you could be investing directly in your business instead of displacement.
Maybe in your business, you can not deny visits to your customers. Perhaps the only appropriate way to do business with them is in person in their location, but there are more situations in which to save such as the following:
- Invite your suppliers to come to you, instead of the other way around.
- Do not travel to pick up orders or merchandise; make a postal delivery.
- Use Skype to make video-conference meetings. At first, it may take a while to connect and concentrate on the conversation, but it’s like all the changes: after a short time, you get used to it.
If you decide to travel, optimize your travels as much as possible and use travel apps to find the best deals. Group several meetings in the same place on the same day.
Avoid Unnecessary Marketing
Brochures no longer work! Their need depends on the sector, but they rarely arouse interest. When was the last time you read a booklet with attention? And what’s more important, when was the last time you made a purchase after reading information in a brochure?
Sometimes we read brochures but rarely do they capture enough interest to turn a prospect into a client. Therefore, if you usually print and distribute promotional brochures, measure the results of this effort and decide if it is really worth it. In many cases, the income is not even enough to cover the expenses of the advertising campaign.
Create Alliances With Buyers
It may sound complex or uncomfortable, but it is not. No matter how good you are at negotiating, as the owner of a small business, you may face the fact that the quantities you buy are practically minimal.
If you associate with other small companies in the purchase of larger lots, you can request volume discounts, or get more flexible agreements regarding payments. In large purchases or purchases that are repeated on a regular basis, this effort is well worth it.
Bad inventory control can disrupt your cash flow because it ties up your company’s money. Once you’ve piled up your cash in the warehouse, you can not use it for anything else. Worse, if it’s not all sold, you may end up having to discount it or cancel it, losing money or something.
Finding the right inventory control balance between how much inventory your organization needs to meet customer requirements and how long it would take suppliers to make last-minute orders can be difficult, but it’s possible. You can even use inventory apps to make the process easier.
Focus On Cash Flow Security
When companies have to cut costs, they are usually so focused on cutting costs that they miss a much more critical parameter: cash flow. Cash flow, not costs, is the most crucial operational control variable, especially in times of cost reduction.
Take Measures To Speed Up Payments From Debtors
To avoid late payment from customers, bill immediately. When you stop billing, the customer feels that you do not care how long it will take you to get your money. Secondly, measures should be made to promote a speedy payment. For example, the exact specification of due dates and the transmission of overdue messages.
Review Credit Policies
The management of customer loans is an integral part of cash flow management. Sort out unprofitable customers, those that cost more to maintain than they add to the bottom line. Identify those who have a history of slow payment. If a customer has a delayed payment for your services, it may be necessary to change your operating terms.