As you know, your finances can make or break your business, so it’s vital to keep them in check. Here’s some tips!
Don’t miss out on entitlements
Take advantage of recent tax and regulatory changes, such as:
- the $20,000 instant asset write-off threshold, which applies until 30 June 2018 for companies with turnover of less than $10 million
- the new crowd-sourced equity funding regime, which reduces the costs and regulatory requirements for public fundraising
Also, the lower 27.5% tax rate for businesses with a turnover under $25 million came into force starting in the 2017–18 financial year.
Brush up on basics
Have a clear idea of your where your income streams are coming from and where your funds are going in expenses. It’s a good idea to always overestimate business expenses and to keep an emergency fund in case something goes wrong… simply becuase it can. Constantly review your budget as it will keep changing over time.
Cash flow is the fuel that keeps a business running smoothly and you need to keep a close eye on it. Do you understand your break even point? How many sales are required before you cover costs and then turn a profit?
Get help with bookkeeping
You might save money by doing your own bookkeeping, but seriously, do you want or need to? If you aren’t good at it or have trouble finding the time, it can actually hurt your business. Hiring a bookkeeper or accountant with the expertise to dissect your numbers, help you calculate deductions, organise your cash flow and keep your records in order might just be one of the best investments you’ll ever make. I know it was for me!
Despite being a finance chick myself, it’s not what I love doing or am especially good at. I’d rather be sitting with my clients and assisting them any day of the week!
Also, if you’re tech savvy, consider using a finance app or cloud accounting solution that provides real-time insights into your finances and saves you even more time.
Don’t be afraid to shop around for new suppliers or to negotiate better deals. Loyalty is lovely, but not when it hurts your bottom line.
Encourage clients to pay quickly and email invoices as soon as you complete a job.
Most importantly, take time off to work on your business, rather than just working in it. It might be ‘easier said than done’ but it’s a fabulous and worthy investment of your time.