Stay In Control Of Your Business Finances: Small Business Bookkeeping

Sunday, 29 Mar 2020

Running a small business in Melbourne is a bumpy ride, which can become less challenging if you have free-flowing capital to back the operations. Thus it becomes imperative to stay in control of your finances to make your venture a success.

A small business owner has several responsibilities, and bookkeeping must be on top of the priority list to ensure smooth functioning of the business. This is the reason why entrepreneurs rely on experienced and professional bookkeeper in Melbourne to organise their books, prepare the budget, and keep track of the incomings and outgoings.

Here is a look at how you can take control of the business finances until you find the right bookkeeper for your organisation.

1. Keep Updated Records of All Transactions

You must have a bookkeeping system in place to track every transaction that is taking place in the organisation. You can take help of a bookkeeper as they are adept at recording all the expenditures and receivables. They usually utilise a cloud-based accounting system to keep the books well-organised and up-to-date.

These records are immensely helpful at the time of the tax season and for making financial projections for the future. The software aids in generating all the reports and documents like profit and loss statement, balance sheet, etc. without any hassles.

As the business owner in Melbourne, you must review the books every week or month to understand the financial status of the organisation and work out ways of improving the business further with the available information.

2. Keep Your Personal Finances Separate

As a far-sighted entrepreneur, separating your business and personal account should be your first step towards setting up a robust financial system. If you don’t do it in the initial phase of the business, then there is no way that you will be able to differentiate between personal and business expenses at the time of filing the tax return or end of the financial year.

Also, if you are putting your own money into the business, categorise it as a personal loan to the business, which will be paid back to you when the organisation in Melbourne starts making profits. It will help you to determine the profitability of your business effortlessly as the income will be separated.

3. Create Your Budget

The budget gives you a roadmap for setting your financial business goals and aligning them with a timeline to measure the performance of the entity. It allows you to forecast your income and expenses, which include the rent, salaries, debt, insurance, etc.

Your bookkeeper can help you in envisaging the payments and receivables with accuracy. You can compare the actual income and expenses with the forecasted amount to understand the deviations from your targets and find out ways to overcome them.

It can help you to reduce debt and utilise the extra capital for the growth of the business in Melbourne.     

4. Cut Back On Redundant Expenses    

In the enthusiasm of running a business for the first time and earning profits, many young entrepreneurs end up squandering capital on unnecessary tasks. It can happen once or twice but do not make it a habit as it will affect the bottom line of the business.

While tracking the expenses, you can gauge which costs can be eliminated and which are significant for the growth of the business in Melbourne. Your bookkeeper can inform you about making sensible investments and doing away with needless expenditure, such as lavish travel and accommodation for a business trip.

You can also make use of the small business bookkeeping apps to get the same information on your mobile phones and access real-time financial data on-the-go. 

5. Chase The Defaulters

To maintain a positive cash flow in your entity, you will have to get the receivables on time. It means that the vendors and clients must make the payments without any delay. A bookkeeper proactively sends out invoices to clients and follows up with them regularly to get the money into the business account.

It is significant to get this capital into the business as unpaid invoices can create an imbalance in the cash flow. Many entrepreneurs in Melbourne offer a discount for early payments to encourage timely payments.

Communicate the terms of invoice payments effectively to your vendors without straining your relationship to keep the process streamlined. 

6. Emergency Funds For Your Business

An unexpected expenditure like a steep rise in prices of the stock or breakdown of an expensive machine, can disrupt your monthly budget. Also, if you do not have sufficient reserves to cover this expenditure, it can lead to losses and even the closing down of the business.

Thus it is vital to secure an emergency fund besides the working capital that can work in your favour in case of a crisis. It also reduces the risk associated with a business. So keep your savings aside and keep adding to this fund to make it grow and come handy in challenging times or an emergency.

7. Seeking Finance For Your Business

If you need to purchase a property in Melbourne or vehicle or want to refinance your business loan, then you need to get in touch with several financial institutions. Use online tools to compare the business loan options and understand the repayment method details.

If you think that your business has the capability of repaying the amount as per the terms, then this is a suitable way to attain more capital for the expansion of the entity. Refinancing existing loans also help in cutting costs.

Your bookkeeping company in Melbourne can assist you in finding the best lending institution as per your requirement.

Conclusion

If you are a novice entrepreneur in Melbourne who has just started out in the industry, then make sure that you pay attention to the financial management tips mentioned above. These are also beneficial for business owners who do not have the support of a bookkeeper.      

Let‘s Connect

Search

Get In Touch

Archives

Categories