
Budgeting and forecasting
The end of a financial year is a great time to plan your finances for the following year. Try to assess what you expect to spend and what you expect to earn in revenue. This will help you to prepare for costs ahead and to avoid nasty surprises. Creating a budget sheet in advance will also help you to avoid over-spending. Look at trends from the last year, including peaks and troughs, and apply any seasonality to your forecasts.Staying on top of cash flow
Your cash flow is a fundamental part of your business’ finances. Good management of your cash flow allows you to see whether your business is running at a surplus or deficit and to act accordingly. Effective cash flow management requires good book keeping as well as a robust process for credit control. It’s also important to ensure your business stays liquid and can meet all your monthly financial obligations, from rents or mortgages to salary and utility bills.Managing your business relationships
Make use of accounting resources
If your budget allows it, then seek the support of an accountant. They can offer professional advice on how best to manage your business’ finances based on your specific circumstances. Knowing that your finances are being handled by a professional will allow you to focus your attention on other areas of your business.Regular review
Reviewing your business’ finances shouldn’t be something that you only do once every twelve months, it should be a regular process throughout the financial year. Get into the habit of frequently checking things like your cash flow, your performance against budget and your own business credit report. This can be easily obtained through Experian and will allow you to check for any information you’re not aware of as well as ensure there are no errors. By following these five steps, we think you’ll find managing your small business’ finances a lot less stressful! Do you have any tips that you could share with us? Ade Potts is managing director of Experian SME.Share this story