If there’s one thing that terrifies business owners more than anything, it’s the finance spreadsheets!
The worry of money and income always plays on the mind of CEOs, and it’s a constant source of frustration. Especially for small businesses, when every penny matters.
The thing that separates successful startups from those that fail is careful control of the accounts. The best companies know how to manage every penny.
They understand how to make the most of each piece of stock, and account for everything. Nothing is left to chance.
Keep business separate from personal accounts
When you’re first starting up, it’s easy to mix business and personal accounts. Maybe you’ve commissioned a website design, and you pay out of your personal account.
Perhaps you’ve picked up some supplies, and you quickly put it on your personal credit card. These are the types of transactions you need to stop making.
It’s easily done when you’re running a solo business. But, this could all come back to haunt you. Most importantly, it’s very difficult to keep track of where the money is.
Learn some basic bookkeeping
There is a fine art to balancing the books professionally. You need expert spreadsheet skills to keep track of every purchase, invoice, and transaction. And, this is just the start of your journey.
As your business grows, you’ll need to graduate out of the Excel spreadsheets, and into something more professional (we’ll come to this soon).
But, first of all, learn the basics. It’s an essential part of managing a small business. Understand what you should be keeping track of, and how best to present them. If you need help, take a course.
Use software to help you
As we hinted at before, you’ll eventually need to upgrade to professional accounting software. At this point, it’s also worth investing in automated software across the entire business.
We suggest using automated software for your purchasing process and transactions. It will help you manage lotted and serialised stock items, and process their payments.
The best software will automatically update your accounts, and keep your finances balanced.
Always monitor your bottom line
When it comes to accounting, there are lots of numbers to crunch! There are ingoings, outgoings, taxes, invoices, and all sorts of others.
However, there is one figure that is the most important of all. Your bottom line. The bottom line is the final profit margin after all other outgoings.
Your business lives or dies by this number. If you do nothing else, make sure this figure is always positive. If it’s not, something is drastically wrong.
Hire the experts
Of course, if you’re not comfortable managing the books, speak to a professional accountant.
In many cases, this is the best option. As an entrepreneur, you want to focus on the creative aspects of the company.
You need to captain the ship, and power forward!
Don’t get distracted by the numbers, but make sure that someone is taking care of them.
When you’re confident the accounts are in order, it lets you concentrate on more important matters.
Most importantly, it helps you sleep at night!