Ways to manage your business finances effectively

BALLARAT, Australia - Jan. 30, 2022 - PRLog -- As a business owner, it is important to control your finances and prevent money loss on sales by regularly evaluating your financial position, profit and loss, cash flow forecast and break-even point.

When you run a business, you must keep up with your bookkeeping (https://www.skyaccountants.com.au/bookkeeping) and financial reporting.

Bookkeeping system

Set up a bookkeeping (https://www.skyaccountants.com.au/bookkeeping/) system that can simply be a record keeping book from an accounting software such as MYOB or Quicken.  Make sure you regularly update your entries to know the exact state of your finances.  Implement financial and employment policies and procedures to know how long you should keep business records and find out whether you are required to register, report and pay GST.

Cash flow management

It is helpful to have a projected cash flow for the next 12 months to find out if the business is growing or losing money.  You will be able to anticipate how much and when the money is going out and coming in, so you can maintain a positive cash flow.  You should create a budget to help with your planned financial business operation and measure it against the forecast.  Plan more strategically, grow your business and ultimately increase your income.

Another way to maintain your cash flow and grow your profits is to manage supplier payments and customer orders.  You want to make sure you don't owe businesses or the ATO money as this reflects whether you have a strong cash flow or not.  Complete a cash flow forecast statement so you can pay suppliers on time and if customers are the ones who owe you money, you should know how much is owed and how overdue these are.  You must collect right away if the money is already outside of your credit terms.

To make sure that your goods and services can cover your total costs, find out what your break-even point, gross profit and profit margin figures are.  You should also regularly review product and service costs, so you can make allowance for sales dips or rising costs.

Accountants Ballarat & Bookkeepers Ballarat

Our goal is to empower you to become a better, more finance-focused and well-rounded entrepreneur. Contact us at info@skyacc.com.au or 1300 328 855 (tel:1300328855)

Benchmark your business

Create value-added points that you can advertise to differentiate your product or service from competitors.  However, you should benchmark your business against competitors too, so you can plan and implement changes to improve your business.  Understand your customers and conduct a market research to develop your sales techniques and market reach. https://www.skyaccountants.com.au/bookkeeping