When starting a business, it’s not unusual for us to have some form of checklist to hand. However, we can often overlook the important on staying on top of business costs, which could mean that the cash flow of the business doesn’t quite go the way we’d like.
There are many types of businesses from small local businesses to small local high street retailers, and there’s no cookie-cutter solution in place that will suit every set of circumstances, but there are some solutions available that could be worth investigating further:
When we think of accountancy software, it’s easy to conjure up images of a mathematical software that require some form of qualification to operate, but the truth is that there are thousands of everyday apps and programs available that can be easily used by business owners.
While some apps may be free to use, others could incur a charge. Rather than use a platform that is cheapest, we need to ensure that we’re using apps that are tailored to our requirements.
For example, those of us who have difficulty in retaining expenses will often opt for a program that can scan receipts on their behalf. Similarly, those who are confident in completing details in relation to their income and expenditure can use a program that links to a bank account and carried out all the hard work for you.
Not only does the use of accountancy software ensure that you’re able to get business accounts up-to-date, but also ensure that any further entries are submitted straight away, meaning there is less panic when a deadline starts to loom.
Develop an Effective Invoicing System
Not every company will be using invoices in relation to their business. E-commerce stores will normally complete transactions straight away, as it’s a goods-for-cash operation. However, those who offer services will often issue an invoice that has to be paid within a set time.
Although we shouldn’t be chasing customers as soon as the invoice is issued, we do need to ensure that we’re chasing invoices as soon as they fall outside of the due date.
Of course, there will be times when there is a genuine reason for non-payment, but the sooner we’re able to touch base with a customer, the sooner we’re able to establish the reason and work with the customer.
More often than not, business owners find that the reason for non-payment is simply due to an oversight and is usually paid promptly following a subtle reminder.
However, if we just keep off chasing invoices, the collection of any monies due could be more complicated, especially if come customers can’t recall the initial invoice.
Open a Business Bank Account as Soon as Possible
There is so much to do when running a business, especially at the beginning. It’s understandable that many assume that the opening of a business bank account can wait, but it’s actually something that needs to be done as soon as possible.
If we don’t have a business bank account, then it often means we’re using a personal account, which could cause confusion when it comes to paying the company taxes.
A business bank account not only ensures that there is clarity when it comes to income and expenditure, it can help when it comes to getting your tax demands paid on time.
Traveling for Business Can Become Expensive
There will be times when business owners have to travel. This could be for a convention, or to meet a new client. While it’s important we have somewhere to lay our head, it’s important not to get caught up with the more luxurious elements during the beginning stage of the business.
Although it can be tempting to choose luxury, we essentially just need somewhere to sleep, and any extravagant spending could have a negative effect on our bottom line.
Of course, you will need to be comfortable when staying overnight, just be careful not be drawn into paying more than you need to.
The same can apply to traveling expenses. If you’re traveling by car, then it’s likely any tax relief will be connected to the price of fuel. However, airplanes and trains are methods of traveling that could mean business users will end up sending more than they need to.
Business owners who choose to stay with the basics when traveling for business will find that their profits are healthier when it comes to the end of the tax year.
Is Renting Cheaper Than Buying?
Depending on the niche of your business, there will be times when you need access to specialist equipment. Most would assume that ownership is preferable, but does it make more sense to rent during the early stages of the business?
Of course, you won’t be able to rent every single piece of equipment, but it is something worth investigating if you’re trying to cap outgoing expenses.
There may be times when buying outright is more cost-effective than renting but carrying out the research could mean that a business must spend less when acquiring new equipment or services.
Nowadays, it’s easy to lose track of what a business is spending, with the ramifications only being clear at the end of the tax year. Keeping tracks of expenses and carrying out some research could mean that you business can hold back capital for more important aspects of the business.