Managing finances is one of the most crucial aspects of a small business. How you go about it can make or break a business. As you serve your customers and look for new market opportunities, remember that your bookkeeping is just as important.
Here are 5 top tips on handling small business finances.
1. Get an accountant
This is the single most important piece of advice for small businesses. Too often business owners think they can easily handle everything, including bookkeeping. But it only takes a few small errors for your business to get into trouble. Also, as your business grows you may find yourself with little time to manage taxation and other accounting issues.
You do not have to employ an accountant full-time: An accountant for a small business may only require a few hours per week to ensure that your finances are in order. Perhaps later after your business has expanded will you require an in-house accountant. For now, consider hiring the services of an accounting company.
There are plenty of businesses specialising in accounting in Wellington. Xero accountants in Wellington can help you streamline your finances while you focus on what matters most for your business; your customers.
2. Learn the basics
Simply because you are going to hire an accountant does not mean that you should completely forget about accounting. You need to have accounting knowledge to better manage your business and finances.
No one is asking you to go to school for three or four years to become an accounting expert. There are plenty of books and online resources to expand your accounting knowledge, especially as it applies to small businesses.
In addition to this type of knowledge, you should also know about various legal policies that apply to business accounting and taxation. This will ensure that you do not find yourself in the deep end of things. Learn as much as you can and use the knowledge to keep your finances and business running smoothly.
3. Get a business advisor
Most accountants also double up as business advisors. Their advice focuses on areas of financial management and general cash flow. Business advisors in Wellington can help you improve your sales, do better budgeting and keep better track of your investments and their returns.
You can also get a business advisor separate from an accountant. He or she will guide you in all areas of business including finance management.
4. Stay in the know
Another common mistake many entrepreneurs make is to leave the entire accounting department to the hired accounting professional. The problem with this is that if you are not aware of how your business is doing financially, you will not be equipped to make better decisions in other areas such as marketing.
While most accountants will furnish you with regular reports, be active in finding out exactly how you are doing and what can be done to make things better.
Stephenson Thorner chartered accountants is a company based in Wellington providing accounting and business advisory services to small and medium sized businesses. To see what they have to offer and contact them, visit their website at www.stephensonthorner.co.nz.