Running your own business is a bit like being in a long-term relationship. In the beginning, everything is exciting and new but, once the honeymoon period is over, you might start to find your financial tasks lose their appeal and start to become repetitive and time consuming.
Here are some strategies to rekindle the love this Valentines Day.
Have a routine
We highly recommend setting a regular schedule for your financial tasks rather than letting it all pile up. Decide whether daily, weekly or monthly bookkeeping will work best for you and then set aside the time to do it. When everything is up to date, you will know your numbers meaning your business will run more efficiently and everything will just be easier. Important decisions you need to make can be based on real-time data and business insights, rather than guessing. And you can avoid costly financial mistakes and errors.
Issue any invoices
Make sure you include time to create, send and chase your customer invoices as part of your routine. If you’re using Xero, you can include a link allowing your client to pay you online or allow you to create recurring invoices. The repeating invoice function allows you to invoice your clients on a regular basis without having to lift a finger.
This can be combined with tailored e-mail reminders which automatically prompt clients who haven’t paid which can speed up your invoicing and help you get paid faster.
Keep track of your receipts
So many of us make the mistake of not keeping our receipts but all those small amounts can soon add up. We suggest keeping on top of your receipts and with Xero add-on Hubdoc you can simply photograph your receipt, like your train journey or cup of coffee, and send them straight away.
Keeping all your receipts is important for a number of reasons: evidence of transactions, proof of your finances to HMRC, assistance with budgeting and they allow you to be able to claim all of your deductions in your tax return and give an overview of your business year.
Cloud accounting software can make tracking expenses and income so much easier. Automation can eliminate mundane tasks and increase productivity making it easier to scale your business if you are wanting to grow. It’s also a good idea to check if there are any processes that can be automated, for example, recurring invoices and direct debit arrangements can automate payments and save time leaving you able to focus your efforts elsewhere.
Take a look at the manual tasks that eat up hours of staff time every month and identify those that can be automated. Using an add-on like Hubdoc automatically processes, categorises and sends your purchase receipts into Xero without you having to do a thing and are all sat there for easy reconciliation.
Create a budget
Creating a budget is an essential step for any small business. It provides a clear understanding of your income and expenses, which will help you make informed decisions going forward. By sticking to a budget, small businesses can better manage their costs which can increase your overall profitability and help your business to grow.
This can also help with cash flow. Take time now to look back at the whole of the previous year. You can compare month on month, quarterly or yearly figures for cash flow statements, balance sheets and a profit and loss breakdown. You can then use this data to get an idea about patterns and trends that your business is following so far. Then use your up-to-date financial information to set a realistic new budget. This can help you avoid costly mistakes and make decisions that support the long-term success of your business.
Keep Accurate Records
Accurate financial records provide valuable information about a small business’s financial performance and health. This information can be used to make informed decisions about investments, expenses, and other financial matters, which is what will inform your budgeting.
Accurate financial records provide transparency and accountability, which can be important for building trust with employees, lenders, and investors.
Accurate financial records are also necessary to comply with tax laws and regulations which is critical for avoiding fines and penalties.
By approaching your financial tasks with a positive mindset and a little bit of TLC you can rekindle your love for this crucial aspect of your business which contributes to the overall success and sustainability.
If this is not your strength or you find it too time-consuming and need help, we are here for you! Why not give us a call and see how we can take some of the burden away and help to rekindle some of the lost passion for your financial tasks.